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Sorry, two articles! Sorry for the typo!! Fat fingers...
Well done for correcting the Motley Fool articles RichKen !
It is interesting that The Motley Fool have actually written tow articles about Bushveld Minerals in the last 48 hours
On Saturday:
https://www.fool.co.uk/investing/2019/09/14/thinking-about-buying-the-bmn-share-price-read-this-first/
The above one was not very accurate and poorly written! I spent some time and wrote to them correcting the errors and pointing out some important factors which have influenced and will influence the future. You can see how I rewrote this further back on this thread!
On Sunday:
https://www.fool.co.uk/investing/2019/09/15/for-sunday-why-i-think-the-bmn-share-price-could-be-set-for-a-rebound/
Certainly a better read and a better-constructed article. We should be pleased to see these articles as they will open new investors via the Apple Share App as well as Yahoo Finance who use these articles in there investor news feeds.
The simple fact that VRFB technology is going to be more and more in the news in future will mean people will want to know how to invest in this technology and its supply chain and we are at the pinnacle of both in what we offer.
Other news!
Bushveld Minerals are closer to having there first Minigrid using a solar array with energy storage installed at Vametco from a recent tender document for this project :
"South Africa is currently facing power supply shortages, this is evident through the power cut or load shedding that has been occurring nationally. South Africa has, in the past, depended on non- renewable energy, mainly the burning of fossil fuel (coal) as a means of energy supply. Due to these power supply challenges; South Africa has shifted its focus on the need to explore other means of power supply such as the Independent Power Producer (IPP). The IPP projects makes use of renewable energy as a means of energy production and supply. This proposed study project is a pilot project for combining PV solar with battery storage (Vanadium Redox Flow in this case), a new technology that has been successfully implemented in the United States of America at the Maharishi University. This pilot project at Vametco will assess the economic and technological feasibility of such a project within the South African context."
Bushveld will demonstrate the importance and capability to SA through this key project and it will benefit the plant!
Cheers, RK
Part 2:
Risks ahead
BMN share price should grow over the next few years if the company can meet its growth targets and its expansion plans. However, as with any commodity producer there are risks, but the vanadium market is growing quickly and new energy storage technology called Vanadium Redox Flow Batteries and these have multiple advantages over Lithium Ion for stationary systems. There is always potential that can go wrong as Sirius Minerals shareholders have discovered (but that company has huge debt). However, unlike Sirius Minerals Bushveld are not building a mine and have no debt. They have grown the business through brownfield acquisitions bought at below market value and have repaid any financial support off within months on each acquisition.
Mining projects are usually delayed and come in above budget. But Bushveld growth strategy has bucked this trend. Meanwhile, Vanadium prices are volatile and difficult to predict. Rising prices typically lead to increased sector output, which drives down prices and profits. That’s just how the free market works.
To try and offset some of these risks, management has diversified the business into new areas such and they are building a vanadium electrolyte facility to produce electrolyte for these new Vanadium Redox Flow Batteries. They also own a 10% share in a tin mining company also listed called Afritin. These projects are still in their early stages, but they are progressing. According to the firm’s second-quarter trading update, Bushveld has produced its first batch of electrolyte. This has now been sent for testing at various battery producers. The group has also “delivered our first vanadium battery rental product.” Leasing the vanadium will ensure that the price of the vanadium which is a key part of the cost of a Vanadium Redox Flow Battery (VRFB) can be spread as an operation expenditure rather than an upfront capital expenditure. This will generate long term income for the business in this massively growing market of energy storage.
Self-sustaining
Bushveld certainly looks to be an exciting business operating with plenty of potential for growth over the next few years. Most importantly, the company is also self-sustaining.
Its second-quarter trading update reports that the business’s mining arm, Vametco, is cash flow positive providing vital cash to support the rest of the business. On top of this, the company had $44m of net cash on the balance sheet at the end of 2018 and no debt, giving the group plenty of financial flexibility.
The bottom line
So overall, if you are thinking about buying the BMN share price, it is worth taking into consideration the risks that face the business as well as its growth prospects. In my opinion, the firm’s cash generation and strong balance sheet mitigate the threats to the business model here. With its growth into one of the fastest-growing global markets energy storage, it looks a very strong opportunity for investors.
Cheers RK
This is what they could have written:
Part 1 :
Bushveld Minerals (LSE: BMN) saw its share price rise nearly 500% in 2018, but the company hasn’t been able to repeat this performance in 2019. At the time of writing, the stock has fallen 45% year-to-date as it followed the fall in the vanadium price.
However, following this decline, the BMN share price now looks cheap. However, before you buy in, there are several things you should know about this business and its potential.
Growth market
Bushveld is a dedicated miner and producer of vanadium, a rare-earth metal that is used in the construction, aerospace and automotive industries. By adding 0.5 kilo of vanadium to 1000 kilos of steel, its strength is doubled. Last year, the price of the metal hit a 13-year high, which ignited a surge of interest in companies with exposure to the commodity. Bushveld is one of the few publicly traded vanadium producers in the world, so naturally, investors flocked to the shares.
Thanks to this price spike, and production growth, Bushveld reported a net profit of $30m or three cents per share for 2018.
The small-cap miner is currently supplying approximately 3,000 metric tonnes per annum (mtV), 3% of the global vanadium market. It plans to increase production to more than 8,400 mtV within the next five years taking its share of the market to around 8.4%. If the company can meet this output target, sales should expand substantially from current levels.
City analysts are also expecting the company to profit from the rising vanadium price. Reports suggest that raw vanadium prices should reach a level of around $45 per kilo by 2020, up from the current price of $37 per kilo.
god where do you start with that 'article' - I guess that the mistakes are helpful as they demonstrate quite precisely that they really have no idea what they are talking about.
Finally a write up in the Fool. I have been over the years sending them requests for a report. The publicity that there reports receive is strong. What is always disappointing though is the inaccuracies within in it.
Like 3000 million tonnes of Vanadium per year! That would be nice.
Still that report may open new investors to research and that could be good for all existing and knowledgable investors here.
Cheers RK
That must have been a post pub write up!!!
highlights include:
"vanadium, a rare-earth metal that is used in the aerospace and automotive industries"
"supplying approximately 3,000 million tonnes per annum," WOW!