Member Info for BenAlder

I used to be incredulous at the desparity between EBITA and net profit. C1 costs and all the rest. Others at the time thought $10 - $12, which I thought far too high, so I went over the books, and they are about right.

I'm expecting a B/E nearer to $39. Only another 15 months to find out.

Look at it as a worst case scenario, and yours the optimistic one. ATB!

No, they are using $40 kgV . Two lines up from ASCC.

@HarChris - I'm talking Post tax, Net profit. Check that brokers report you have and see what they have as net profit for 2023. I dont think you have allowed for depreciation of $20M and financing of $6.6M, which takes a chunk out of your PTP. Almost another $6 added to your B/E.

From BMN Investors page - ARC brokers report. 2/2/23
https://www.bushveldminerals.com/wp-content/uploads/2023/02/Bushveld-minerals-BMN-LN-Record-production-achieved-in-trying-circumstances.pdf

Group all-in sustaining cash costs* $35 KgV
*Including royalties, marketing costs, G&A, corporate overheads and sustaining capex (excludes depreciation and financing costs).

There are always little extras I find in the Results each year that add up. Like Consultants fees, Finance and legal costs for Mustang etc, a glossy Hollywood trailer advert, etc. Meh.

Summer is the busiest period for steel production usually, so would hope for a small rise from now, especially as China is getting back to full production too.

$40 or below is only going to be meh profits for 2023. Need V back up to $45kg to net above $20M.

I believe a big squeeze will come, but perhaps not until next year when all economies are back in full production and spending resumes. New VRFB projects alongside a massive arms race should start to impact demand.

If China becomes an exporter of V using Russian ore, the prices could be held down nearer $30, but I think that is a few years away, as they will be producing massive amounts of electrolyte for local consumption, and there after exporting it along with batteries to the world at the cheapest price.

We are in a supercycle for commodities. Inflation and supply deficits reset historical price trends, where new highs are set, and the new lows are established at a higher level too. More like $30 to the previous $20. But the high is expected before the low, as the deficit has to be filled and it takes a few years to raise cash and get a mine producing.

Something like 2018 is possible within the next two years, but a steady $45 - $50 kg would do nicely too. Lets see what happens. Place your bets!

@ jdt - You forget all the other sizable costs to be deducted from that 'profit'. 26% of Vametco profits, depreciation, royalties and selling, general & administrative expenses etc. Depreciation is close to $20M. Wogan get about $3 (7.5%) commision for every kg they sell. They sold 75% of our stock last year. So $9M or $10M and about the same for the other costs. This years capex spend is almost $9M.

So could be around $50M pa or $12.5M a quarter for all other costs. Eyewatering and why we need a high V price. Dont get seduced by C1 costs. it only half the story.

Inventory is money in the bank (almost), but probably for electrolyte, and not realised until next year. By then we might hit our elusive 5000+Tpa run rate and lower costs further.

@ Cindercone - A mere 3x? Brokers target of £7. There goes their credibility along with SPangles.

Is Mokopane Royalty free at this time?

The Chinese are as likely to be interested in Mokopane as any Western Company. They are actively seeking to obtain iron and critical minerals in Africa at the moment, and willing to invest and develop. Perhaps the BRICS alliance makes them as attractive as any Western investment.

I think something will happen within the next two years and will lead to development with a partner. Two reasons, firstly "the Mokopane license held by the Group requires that mining operations commence prior to the end of January 2021. As at 31 December 2021 no mining has taken place at the site. An application for an extension to requirement to commence mining activities has been submitted to the Department of Mineral Resources and Energy ("DMRE"), however a response has not yet received. The directors are confident that the extension will be forthcoming and the license therefore remains valid. " - So if extension granted it will probably require action fairly quickly.

Secondly, the company cannot develop Mokopane alone without a large fund raise during the next 5 years, due to the expansion and upgrades to the two plants planned. FM has a track record of getting into partnership deals to avoid dilution. I could see BMN selling a majority share with conditions on developing a pig iron plant with an off take for the vanadium rich s lag.

Youre in a good mood today. Moved up to a 'Buy' rating!

Yes the dire electrical situation has definitely created a market for those that can afford to take control themselves and not wait for the Govt to act. At least they made it possible for the private sector to come in, which will eventually replace Eskom. The soon to be operational mini grid will be able to showcase a finance deal model as well as a working battery system.

Its easier getting information out of the Pentagon than BMN these days.

FM keeps talking about being in at all levels of the value chain. Now to leverage Cellcube tech into Africa. Would suit the BE spin off.

The missing piece in the VRFB story in SA is battery manufacture.

Either Mustang or BE could manufacture or assemble under licence from Cellcube. Create a local battery sales/manufacturer for the South African region, floated on JSE to launch and fund it.

South Africa's electricity crisis will intensify in the next two years before it improves as private power generation sources come online, Investec Bank CEO Richard Wainwright says on Bloomberg TV.

https://www.msn.com/en-gb/money/other/s-africa-power-crisis-expected-to-intensify-investec-bank-ceo/vi-AA19MAZx

While SA is a basket case, there is a burgeoning market there for VRFBs, so wonder if BE will be involved.

@Lindon - They already supplied the vanadium to Cellcube to manufacture the electrolyte for the mini-grid, they wont be producing it themselves.

From 23 June 2022 RNS -
"Vametco has sold 26 mtV for the production of electrolyte, required for the VRFB which is currently being converted into electrolyte overseas."

@pb940 - No the 3.6% is just the penalty MUST will forfeit if they screw this up. The total consideration payable to Garnet for its (50%) shareholding in EHL is US$33,166,667. After fund raising and refloat the market may value Mustang/Enerox higher then the suggested $66M.

This deal is mega for Mustang. I could not see this being at all attractive to investors when they only held a non-controlling interest. I think this will simplify the prospectus and satisfy the FCA.

I imagine after all their DD and then accepting the 17p conversion price, they'll be as bemused with the current SP as most of us.

They could easily defer the CLNs for another year. Orion are getting 10% compound interest on them after all and I think they would prefer money over shares. They can see that their money has been well spent and production has increased to target. I don't see BMN paying off all of the notes this year unless they arrange alternative finance, which they are currently looking at.

I believe so too.

From what I read, the last two funding events issued a lot more shares via CLN's and warranties. The company is heavily indebted and requires a lot more funds to get their machine over the final testing phase. The BOD have generally failed to meet time expectations. Company is vulnerable to going bust and/or cheap take over.

However at this price, any funding is likely to push the SP back up and that makes this worth a small punt imo.

We are here because the company has not been very profitable over the last few years, combined with sustained selling by our debtors monetising their share payments, and the general malaise in the Markets this year.

Skepticism remains until profitability is proven.

SP is market driven. Market is driven by sentiment or fear and greed. AIM is a peculiar market and in no way efficient. You follow the hype short term or you follow the fundamentals long.

There is still uncertainty in this year as to whether they will meet targets and make the profits that are expected by commentators on here, including me. These are unlikely to be known until the half year results are out in the summer.

What we do know is that the V price is at a level that should produce a profit this year and more next year, with our greater efficiency. So as long as no other surprises, things look positive and the SP cheap. As the situation evolves the SP will respond, and at these levels it looks to be upwards and not down to me.

Its an educated gamble this investing lark. DYOR.