Bushveld Minerals Share Chat (BMN)

Snap :)

It's looking good for Vanadium miners, especially those who hold the largest resources on the planet.
https://seekingalpha-com.cdn.ampproject.org/v/s/seekingalpha.com/amp/article/4409905-vanadium-miners-news-for-month-of-february-2021?amp_js_v=a6&_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=16145313667534&csi=0&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fseekingalpha.com%2Farticle%2F4409905-vanadium-miners-news-for-month-of-february-2021

Brilliant read that, thanks

Mogwhy,

Some institutions call it a rental agreement and add a minimal purchase fee at the end, others call it a lease and charge a 1% upwards fee to pass on to a third party, others insist on having the goods back so they can refurbish and relet for improved margins.

Unless the tax/revenue Govt department stipulate in S.A. it must be shown in a certain way I don't know how you will know at this stage what is what ?

this relates to the companies existing dividend policy where free cash generated is allocated to reserves, maintenance, capex growth, debt amortisation, acquisitions and/or dividends, pretty much in that priority order.

the answer is the parties discuss renewing for a further period, the documentation will set out who has the rights to buy/sell the electrolyte and on what basis. renegotiation for a further term or for an orderly exit would commence well in advance of the final rental payment, and most docs include a secondary rental payment schedule which commences at expiry of the rental agreement where a reduced rental falls due until everything is either renewed or closed off. we havent seen the docs so its not possible to be more precise.

https://www.crescat.net/february-research-letter/

I found this a really interesting newsletter on commodities. Thought provoking - worth a look just for the charts.

A small technical point, but it's a rental agreement and not a lease.
At the end of the rental term the renter loses the right to use the asset.
This raises an interesting scenario at the end of the 10 year rental agreement that IES has with Pivot Power's project at the Oxford Energy Superhub. How will a deal be structured with PP to allow them to continue using the electrolyte at the end of the rental agreement, as the project life is longer than the rental agreement.

Lindon, the whole point about the leasing model is that it allows the a third party financing company to come in and own the electrolyte whilst taking leasing payments. They do not get to own the electrolyte without buying it from us first.

I am surprised that you don't appear to understand that by now as you have been posting on this board for many years.

Yes obviously, and no doubt for the Oxford project that’ll be from V shipped to the U.K. Reading based electrolyte supplier ... but as it’s NOT home produced electrolyte, how does leasing (via a VERL) deal work, does it just give ongoing financial benefit to the Reading electrolyte plant business? Does BE gain any benefit from the lease other than eventual recovery of the V?

It’s a good question. What I’m more interested in though is whether sustained strong V prices lead to a large II taking a position.

We know it’s near impossible to buy on open market in volume. Fortune has said he will not place large funds to the detriment of loyal shareholders.

If he retains that position and the share price continues to present a disconnect to the V price, then I suspect some IIs may be tempted by taking a position on the open market (and swallowing the premium which will come with that, given the security of the share price vs vanadium price).

Can’t see a special div or the like imo. And not would I want one given the value/growth story is yet to be told.

Sorry Lindon, bloody auto correct!

London, Bushveld have been supplying their own Vanadium to a third party electrolyte producer.

https://www.google.co.uk/amp/s/seekingalpha.com/amp/article/4409905-vanadium-miners-news-for-month-of-february-2021

Some nice content on there... the chart that is most exciting is the V demand forecast. (Both FeV and V205)

Also the potential of US market thanks to Biden

Biden signs executive order to review critical supply chains. President Biden has signed a fresh executive order mandating a 100-day review of critical product supply chains in the U.S., focused on semiconductors, key minerals and materials, active pharmaceutical ingredients and advanced batteries like the ones used in electric vehicles.

Good luck to all holders this coming week.

We know that a deal has been signed on a 10 year contract to lease electrolyte for the Oxford Superhub. But currently we don’t produce electrolyte. So how does that work?

https://www.current-news.co.uk/news/invinity-signs-new-electrolyte-rental-partnership-for-oxford-energy-superhub#:~:text=Image%3A%20Oxford%20Energy%20Superhub.%20Pivot%20Power%20and%20Invinity,the%20upfront%20cost%20of%20getting%20the%20system%20deployed.

Also, if that DOES work, it should also be possible for similar deals for any African contracts we might win even though there is supposedly little prospect of our ELZ plant being able to supply any ‘home grown nectar until July ... ish 2022.

But if the hard wear, (batteries) are (presumably) going to be supplied by China based Ronkge Power, wouldn’t they ALSO want to supply (because it would be cheaper than shipping V and electrolyte back and forward to SA ) the Vanadium and resultant electrolyte from their own ‘home grown’ sources?
Just a thinking on how it might be all arranged and how electrolyte supply and/or leasing deals might work or happen in the near term.

According to SP Angel note, BMN make a profit of $6.5m on a V price of $35kgV. At the current rate of increase, we could hit a V price of $45 in 2 weeks time. This would mean extra $45m profit per annum if costs etc remain the same. What should BMN do with the extra cash, dividends, pay off debts, Mokopane ?? Would hardly be a shock if the V price hit $55 within a couple of months. What would we do with this extra cash ? Won't also be too much tax to pay on 2021 figures due to losses in 2020.

He hasn’t posted today but posted twice yesterday. One about the Rand slipping against the dollar and one about Argusmedia noting a tick up in Vanadium to over §35

Should help bring that cost per KG down, not good for South Africa but should be a benefit to any miners that are exporting.

Any thoughts on BBN's Tweet this morning?

Obviously if we are being optimistic, JSE listing based on Eskom contracts might cause a similar Golden summit spike from II's coming on board and the market viewing this as a green technology company but we cannot control this.
The important thing is not having too much expectation on this front as a vanadium supply squeeze is all this company needs to reach all time high's based on fundamentals.

Agree with that Halespur.

Also, any success with BE tenders will be extremely difficult for the Market to price it in to the SP. Contract profitability will be difficult/impossible to assess and the business model with VRFB rental, income streams etc. is so far removed from the mining business. How will the Market value the blended mix of those different businesses into a single Share price?

Excellent post halespur

What we have to look at with Eskom and other vrfb contracts is not the direct technology profits to be made but that it could take out a quarter our production very quickly. This can significantly tighten the V market further and V prices to our benefit, but agree we might not see a the SP doubling on the news etc straightaway.
It keeps me sane not having expectations on Eskom contracts being a direct cash cow but thinking of the longer game played with vanadium supply. Have a read through BBN's posts this year and it gets you very excited about what lays ahead.

If it all goes to plan then this a multi-bagger and people shouldn't be disheartened that it hasn't happened in 2 years etc as some take years.
https://twitter.com/iancassel/status/1365484042905346050?s=20

Thanks for the clarification Daisydog..

Though what I see is over a 60% increase in the SP In the last 3 months..Whilst I questioned the low share price in December, I am now happy that we are heading in the right direction..Winning any ESKOM contracts will boost the SP of which I have no doubt along with the rise on V price. I find no reason to make any negative comments at present..Maybe an improvement in BMN communications..That's it.
All the best.

Its not so much a case of Eskom news moving the sp , but a sustained period of buying pressure which will be the trigger. The share has moved at times when no news has been directly released, the 2018 rise can be put down to several factors , some linked ( e.g. Golden Summit). Any success with the Eskom tender should have a positive impact on the sp, but I would caveat that by being dependent on exactly what we would gain as part of the contract. It may be that some of that detail is not immediately available and also depends on how any partnerships are going to work.