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Well done BBN for calling it with such great detail. I remember we used to wonder if you were Fortune himself but I know you have other investments that you analyse equally well so can't be :). Maybe Fortune had to get this RNS out at 4.32pm as the detail by BBN might have looked like Insider information :)
Bella might have have called it first mind so credit to you both. The important thing is BMN are going forward even if the share price will lag while the world is uninformed.
I think we are witnessing absolute genius at play now. Bushveld are creating their own market, and are so many steps ahead of the market it is unfathomable!
I think Bella deserves a mention too, she suggested this ages ago.
Well Bbn you called it again. Your page 3 and first half of page 4.
Well done, I'm sure you're psychic.
BBN thank you again for a great read. Always well thought through and so easy to understand.
BBN.. Great analysis..
Re Cellcube.. They say they are in negotiations with several parties...how about UET/Cellcube merger /buy out with some sort of investment from BMN.
If you look at VSuns brochure, from memory, the only battery mentioned is Cellcube. If BMN helped broker a UET/cellcube deal they would by default get VSUN as the existing Australian distributor/agent for UET/Cellcube, Avalon/Redt.
For me the VIP is all about creating SYNERGIES AND ECONOMIES OF SCALE. BMN are setting themselves up as investment brokers in a way.
Re your comment about helping source Vanadium. I think this still refers to BMN vanadium and it could simply mean supply deals to OEM preferred electrolyte mfr.
I think BMN might be looking to work with several OEMs in Africa so they can offer best fit for each project.
Should read UET.. Grrr
UEH ?
BBN.. Great analysis..
Re Cellcube.. They say they are in negotiations with several parties...how about UEH/Cellcube merger /buy out with some sort of investment from BMN.
If you look at VSuns brochure, from memory, the only battery mentioned is Cellcube. If BMN helped broker a UEH/cellcube deal they would by default get VSUN as the existing Australian didtrubutor/agent for UEH/Cellcube, Avalon/Redt.
In that it exactly reinforce and makes completely explicit the points you have been making for years about BMN embedding itself further up the mines-to-batteries-to-energystorage value chain.
This is in the main down to the very high percentage of value that comes from the Vanadium in the VRFB battery concept. What some have considered a weakness, is actually critical to establishing a fully integrated and highly sustainable energy storage value chain.
@Alfacomp Would you like to expand on that thought?
BBN - the presence of BMN's strategic VRFB investment platform ('VIP') now completely changes things.
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In addition, under the V23 Resources section of that Cellcube update, the company states this ;
"Although the underlying business units of CellCube are well positioned to take advantage of growth in their respective industries, each division is suffering from a lack of working capital. In addition, CellCube does not have the necessary working capital to pay for its corporate overhead"
"the Company is reviewing strategic alternatives focused on maximizing shareholder value. The strategic alternatives expected to be considered include, but are not limited to, a sale or merger of the Company, continuing to pursue value-enhancing initiatives as a standalone company, capital structure changes, or the sale or other disposition of certain of the Company’s businesses or assets."
So its certainly not all rosey over at Cellcube and the risk profile may be too high for BMN right now.
I am clearly attempting to join a few dots together here but there are good grounds to believing that Cellcube could end up being a target for BMN investment, that the mini grid solution could well form a part of that support and introduction into the S.A. Market. Also, its worth noting that Vsun market Cellcube in Australia, among others of course.
I appreciate that UET are highly likely the main partner for S.A. Including the assembly of VRFB there. However, there is nothing wrong with a little healthy competition, especially when said competition comes with a potential portion of direct ownership.
We will need to wait and see, but I find it interesting that the procurement for the mini grid is under way, but we, the market, do not know which system they will be employing yet.
On the negative side, what was clearly stated by BMN management, was that good management was key to their investment in VRFB OEMs. I cannot vouch for Cellcube management capabilities but if nothing else, I noted Stefan Schauss' resignation as CEO of CellCube Energy Storage Systems Inc was included in that 22nd Oct Corporate Update.
In addition, the investment in Redt/Avalon was made because the merger itself creates a new scale of production capability, which in BMNs view, is key to the success of VRFB companies.
Cellcube do not have that yet, and so an investment there may be too early, but if nothing else they do have that project pipeline, a 136 project installation and 10 year track record. In this fledgling industry environment, that must hold considerable worth. So if nothing else, BMN must be having a good long look at Cellcube and maintaining a watching brief.
All food for thought if nothing else.
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They have not done that because they clearly aren't finished yet. So perhaps there are more struggling VRFB OEMs still to help.
This brings me to Cellcube.
Cellcube plans have recently been included in the Vametco Solar mini grid VRFB. I appreciate that words have been had between Alphacomp and their leadership, but I am not buying the fact that the inclusion of their plan, within the basic Environmental assessment (BEA), was purely because they required a sample plan. The basic environmental assessment requires more respect than that.
The BEA is dated late August. The latest RNS dated 7th Nov states "Commenced procurement for the project." It does not say initiated contract award. To procure one must have a contract in place. If its not decided, then you don't procure.
Recently Cellcube have had financial problems. They have just sold the majority stake in their EnerCube SwitchGear Systems company, but they have retained Enerox GMBH.
According to their latest press release (22nd Oct 2019), that particular company has "close to 140 project installations and a 12 -year operational track record," and "is now engaging to finalize its first major sales"
"Over the past year Enerox launched the Generation 4 product series, the most advanced (“VRFB”) on the market today as stated by independent industry experts.
"Product interest for its newest generation remains to be very strong. The company is nearing several large-scale contracts which will be executed once production capacity can be planned to adequate levels."
"It has taken a lot of time and capital to get to a position that Enerox is at today, but until the company can produce and execute projects with a consistent number of units, the company will continue to be in a monthly working capital deficit position."
So essentially the pipeline is there, a lot of investment has already been made, it is just that they need a capital injection and support, in order to deliver their projects and grow. What that means is that the right industry partner, who is willing to help this company out of its troubles, will receive a lot of capital investment for its money."
Furthermore, Cellcube in February this year, announced a 20MW deal with Immersa in the UK market.
https://www.prnewswire.com/news-releases/cellcube-partnership-with-immersa-paves-the-way-for-80mwh-energy-storage-deployment-300802923.html
So the project pipeline is significant enough to raise interest, given which market it is in.
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However, according to the latest AVL presentation dated Nov 2019, the "start up, commissioning and ramp up of the Gabanintha project, will at best, begin in Q3 2021. That is reliant on a financial close by late Q2, for which they have an MOU with a Chinese partner. Now they might make it but as I said yesterday, new pure play vanadium projects are in my opinion, even more up against it, because of the recent dramatic drop in vanadium prices. Furthermore, the law of averages is heavily against AVL, in terms of project deadlines being hit.
I therefore do not see that ramp up taking place until 2022, meaning they have a minimum 2 year gap before Gabanintha.
As I say, the clear barrier that I see to a BMN investment, is that Vsun are a marketer and developer, as opposed to a OEM, and the VIP platform is specific in that it is aimed at VRFB OEMs. However, that "and the industry" line does exist and the Australian market is potentially a very large one, that right now does not have a strong enough local player. Vsun could potentially fill that gap.
However, right now the fact that the Vsun website is lauding the fact that it has received 2 VRFB contracts in 2 months, says very clearly that it is stalling.
So if it suits BMN, the opportunity is there to stake a claim.
Points 3 and 4 from that same RNS are as follows ;
"Joint development of region or project specific business models for vanadium electrolyte rental. Bushveld enabled the successful deployment of a vanadium electrolyte product in industrial-scale batteries developed and sold by Avalon Battery"
"Joint development of large potential customers or projects well-suited for VRFBs. This includes the work showcasing the technology at the Eskom Research & Testing facility in South Africa."
Note that both have clear references to goals that have already been achieved in this pursuit. That's not to say that they are finished in this regard.
I have already posted my thoughts on the UET partnership, which for me is merely a matter of time.
The above reference to Eskom is for me is a direct reference to UET, given it is their battery that is in that test centre.
So we are back to the other major item that has not been fully covered in that 1st November RNS, which is item 2.
"Supply contracts for vanadium material, vanadium electrolyte and vanadium electrolyte rental. Bushveld has already been supplying sample materials to multiple OEMs."
Sample materials to multiple OEMs.
The above is directly linked to OEMs, so not the likes of Vsun, although the pilot electrolyte plant from C-Tech, could be classed as a OEM.
UET, Redt, and Avalon, must be on that list, which makes it multiple. However, if the list was completed, then why issue a VIP platform RNS or even establish one. Why not simply announce the partnerships and deals, and be done with it?
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Good morning all,
Further to the discussion regarding further potential VIP investments, I would off the following ;
In the VIP Platform RNS dated 1st Nov 2019, BMN laid out 4 key areas of investment assistance for VRFB OEMs under the title "Clear strategy to partner with VRFB companies."
The first of these covered the basics of the VIPs and included the following lines ;
"The VIP will leverage Bushveld Energy's expertise in the energy storage market, its capacity to ramp up vanadium supply and its capital investment to attract additional external funding into the VRFB OEMs and the industry. Bushveld's role would be that of a significant minority investor, with strategic involvement such as vanadium sourcing. . "
Now to be clear, the VIP is aimed at OEMs, but the above does talk about "vanadium supply!" and (BMN) "capital investment" to "attract external funding into VRFB OEMs" AND "the industry." So there is a small window of hope for Vsun Energy.
According to the Vsun website FAQ ;
"We sell batteries from a wide variety of manufacturers including redT Energy, Schmid, UET, Pu Neng and CellCube."
Then we have the article that I posted yesterday regarding the Vsun Apple farm project, employing an Avalon battery.
https://www.pv-magazine-australia.com/2019/09/07/victorian-apple-farmer-installs-vanadium-battery-to-increase-solar-consumption/
So as a minimum there is already a connection there with Redt and Avalon.
Vsun have partnered with several industry wide players, but their electrolyte production partner and thus capabilities, are still limited, despite the fact the agreement with C-Tech, was signed as far back as Oct 2016.
C-Tech have provided the pilot electrolyte plant, but they are not as far as I can see, a company that provides the vanadium. At the time of the initial delivery of the electrolyte plant, the following article was published ;
https://www.proactiveinvestors.com.au/companies/news/167857/australian-vanadium-prepares-for-electrolyte-processing-pilot-plant-167857.html
In that article, it was stated that ;
"AVL has commenced sourcing low-cost, high quality vanadium pentoxide for quality testing purposes from a wide variety of global sources including Brazil, China and Africa."
So as a minimum, Africa and potentially BMN, were already on their radar for supply. Whilst I recognise that Glencore also have a vanadium plant in Africa, for me the connection is far weaker and also, being that it is Glencore, there would have been little need to say Africa, because they are a global dealer in vanadium. So the inclusion of Africa is for me telling.
Naturally, the article goes on to say ;
"In the longer term the company aims to supply its own vanadium pentoxide from the high grade Gabanintha Project for use in the production of vanadium electrolyte."