Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Currently there is a bunch of issues hanging over BMN.
- Q3 results indicate Vanchem annual guidance is about to be missed
- Vametco continues to fall way short of stated capacity - interesting to hear an analyst asking questions about it. Litigation?
- Orion facitily has to be sorted. What's clear is BMN cannot repay it from cash flows as intended, thus re-financing necessary in an environment of rising interest rates.
- Several projects are taking like forever:
a) BE carveout still unclear. Price? Majority interest? Listing?
b) Mini grid saga continues. Several years after announcing the project all they have to show us is a lone drill rig on farm land.
c) Electrolyte plant saga continues, too. BMN stated it was 80% complete, to go online in H1-2023. Translated to plain English this means they hope to be online in Q2. (if it was Q1 they had said so.) That's 3 quarters from where they made the statement. 3 quarters equal 20%, really? Applying their "logic", building the first 80% would have taken them 3 years? As it is too often the case, the numbers just don't add up.
BMN stock is sharply lower today touching 4.30p now. I'd expect tax selling pressure towards the end of the year applying extra pressure on the share price. Maybe this will be the right time to buy again.
In fact it should go higher than 6ish should they get their act together. And then, there is the VRFB opportunity that until now did not come to fruition but the environment for it has never been better. There are many companies and technologies competing and as of today VRFB just doesn't sell. But energy storage is a major trend that should last for decades to come so I view this as a bonus, a lottery ticket for free.
Indeed, the share price is down -55% y/y and down -54% YTD. The disappointments of the past have been priced in. And just as you said, the stock market looks forward and prices in new information like the one releasted today, i.e. the fact that it is almost guaranteed that Vanchem will miss (already lowered) annual guidance. Certainly this would be annother disappointment. Given BMN's track record (overpromise and under-perform) this does not come as a surprise. Obviously the share price already foreshadowed continued underperformance so no need to re-rate in any direction. Should BMN at some point in the future manage to perform better than this, it would come as a much welcomed surprise and I would expect this to (at least to some extent) have a positive effect on the share price. As they say, one swallow does not make a summer. It would take more than just one decent quarter to get completely rid of the discount the market currently applies to BMN stock.
Right, we're almost 1 month through Q4 and unfortunately load shedding still is very much of an issue. So let's assume that Vanchen was able to replicate the record August performance and produce 151t in October. Let's further assume they were able to produce at 100% of nameplate (217t per month) in November and December (a ridiculous assumption IMO). That would lead to production of 584t in Q4, already 1t shy of the lower end of guidance. And that's with 2x 100% of nameplate. The market got the message, hence the stock price sits exactly where it was yesterday. At any rate, this report will not provide the stock price with a much needed significant lift. Bottom line: This dog (still) doesn't hunt!
Vametco quarterly production of 666t = 71% of stated capacity (Vametco 3750mtVpa). The fact that the many resident cheerleaders pretend this was a good result only exposes how much they have become accustomed to the company's continuous underperformance.
Vanchem quarterly production of 350t is an encouraging improvement over Q2 (191t). However, the press release implied the next miss ahead: Indeed, Vanchem's (already lowered!) annual guidance is maintaned at 1350-1540t. However, Q1-Q3 production = 765t. In order to meet the lower end of guidance 585t are required in Q4, equivalent to 90% of nameplate (2600tpa). Q3 production rate was 54% of nameplate with the September rate lower than August's. Achieving an average production rate of 90% nameplate in Q4 at Vanchem, up from 54% in Q3, would be highly unlikely during "normal times" already but is perfectly unattainable with the current rate of load shedding. Rest assured, Vanchem is going to miss the already lowered annual guidance! Exactly this is what "severe load shedding poses a risk to Vanchem's ability to meet guidance." really means. Thankfully there will be lots of load shedding in Q4 to blame for the miss. Imagine there was no load shedding and Vanchem still came in below guidance. No lame excuses for underperformance.
Nope. https://www.investing.com/commodities/ferro-vanadium-80-min-united-states-futures
This goes a long way exposing your delusional perception. "appreciate the direction that the business is moving"? WTF are you talking about?
- Production guidance lowered?
- Mini grid delayed again and again?
- Electrolyte production way behind schedule?
- V prices falling 6 months in a row, down close to -50% since March?
- Load shedding (now stage 6) impacting production costs at Vanchem?
This decides where the business is going and you "appreciate" it"? You're making a fool of yourself, broken record!
I predicted the quarterly and half-year reports won't provide anything to lift up the share price. And look where we are today, right at a fresh 5-year low!
Where's the bottom? Hmm, let's see.... We're entering a global recession, SA load shedding is at its worst level affecting Vanchem production costs, V prices have been falling for 6 months in a row now, annual production guidance has been lowered, inflationary pressures all over the place, electrolyte production and mini grid massively delayed, Vametco running way below stated capacity, VFRB's don't sell.
Takeaway: This dog doesn't hunt!
All is running according to plan in Bushveld land!
https://www.miningmx.com/trending/50822-eskom-to-turn-to-private-sector-as-risk-of-worst-ever-loadshedding-looms-large/
apropos "inaccurate":
ARCM over the last 18 months BMN have delivered on promise after promise. Stop misleading the market.
"Vametco … sustainable production and reduced costs."
Reduced costs? That's your guess. What's reduced for sure, is revenues. And depending on how much more the price of V declines, profits might be reduced to beyond nothing!
"Vanchem … commissioning kiln 3 with resultant increase on production."
Waiting for the next fumble, the next disappointment here. The promised cost reductions might not come to fruition at all!
"Electrolyte plant … huge progresses at construction site."
LOL! Huge progress, what exaclty? They managed to successfully erect a building? Truely unbelievable, what an astounding achievement! They must up for a huge bonus for it! Ridiculous^10! In reality they were dragging their feet for YEARS and all we have now is a construction area. HUGE achievement, indeed. LMAO!
"Mini grid … construction begun. We now know delay due to permissions."
Another case of pie in the sky, promises and zero return.
"Long term wage agreement in place."
Right, resulting in +35% compound wage increase. What a bargain, yahoo! LMAO!
"Studies at Vametco and Vanchem published outlining expansion plans."
"Studies" and "plans". Give me a break!