Member Info for BenAlder

Someone did say that sarcasm or humor didn't translate on here. You are right.

@ Codie - I agreed with you. I used to work with people like you. I fully understand why consultants are used. And you should understand the potential cost/time implications for remedial work if it is not just a case of tweaking different parameters on the new equipment or process, etc. I am a realist. We are up to 75%, what is the issue. It may be down-stream of the kiln as it was commissioned successfully. We don't know at this point.

My mother is 87. I not ageist, I'm amazed!

@Pdub - Chill.

No codie, I'm happy they are being proactive.

Lack of experts in the world and his age struck me, and the fact we could not do it ourselves.
Hope it is because he is good and not cheap! Well done to the old boy anyway!

I understand that, but if we have a problem that we cant fix ourselves, then it could be an issue, but I fully accept we should seek guidance. Hope there is a quick fix and this guy has an apprentice.

Enjoy your weekend.

The kiln whisperer!

It does smack a tad desperate having to fly in a world-renowned geriatric expert to fix a problem. Guess there are not many of these types of plants in the world. Hope the boys are taking notes.

And I hope they remembered to change the water pump when they replaced the chain belt!

I've been moaning about costs and profitability so I have re-checked the books to try and understand it better. Depreciation is the big gouge after production costs. Its been about $18/19M pa. Lease hire and write downs for plant, equip and mach etc. It is applied to EDITDA to get the Operating Profit.

As long as we can derive another $10 - $15 savings on production costs and match sales to production, as planned, and V price stays around this level, the future is very bright.

Assume No further capital spend and cost savings achieved by year end.
Costs improved by $14 to same as Vametco at $23ish. Currently $36.9/KgV .
If Prod/Sales 5000 mtV pa. That would add $70M to the bottom line at any V price.

If V price averages $40 Kg next year and our group costs comes down to only $25/KgV, that is $15 EBITDA profit per KgV sold.
5000mtV x $15/KgV x 1000 = $75M EBITDA - $20M Depreciation = $55M operating profit. At $50 KgV that is $105M.

This is a stinking buy IMO, even if you have to wait a couple more years to see it to fruition.

Stay calm and carry on. ATB!

This was new news to me. From RNS -

"Selling and distribution costs of US$4.3 million (H1 2021: US$2.8 million) increased by US$1.4 million, in line with the increased selling prices as per the Sales and Marketing Agreement that the Company has with Wogen Resources Limited (Wogen). Sales through Wogen represent approximately 75% of total Group sales."

7.5% commission rate by my calcs.

https://www.wogen.com/about-wogen/

Fortune did use to talk of the value chain in the VRFB supply, but they are not interested in those now. Else why give the installation contract to that loser of an AIM company whose name I've forgotten. BE was probably first conceived to sell VRFB's but has since been swallowed up by the business of suppling vanadium.

40% cost of the battery is the vanadium. Currently we are making about 10% profit on producing it. I believe we can get up to 25%+ when our costs come down. Project management, battery manufacturer, Sales and design etc are not likley to make more than 10% of the overall project funding each.

Trying to own the whole value chain is not efficient and is expensive to run. Concentrate and spend money where most money is to be made in the chain. Vanadium.

electrolyte is the vertical integration. BE was created to stimulate a market for this product and increase the consumption of vanadium. That is my take at least.

@pb940 The only value that BE has is its share of VRFB-H/Enerox. If we can make a few extra quid by selling a non-producing company ie BE than great.

What I hope for Cellcube is that they become the company for large scale grid storage in Europe and the USA. They have the right experience outside of China to do it. Some country has to have some ambition to build something like the Chinese have just done even if not on that scale.

But to do that would require a lot of investment, $100M's + probably in the next years. BMN is not going to be able to fund it's 25.25% nor do I want it to. Look at the dilution it already cost us with Mustangs CLN's to fund the last round. I want a return on the vanadium investment soon. We still hold a share thru Mustang or who ever buys it, without future cost, only risk is dilution as you say, but it does not dilute BMN. It is a pure Investment run by hopefully the right people and we can concentrate on supplying vanadium. It is an opportunity to raise cash at a time that we need it. Orion.

No repayment terms have been set as yet. I imagine that the debt will be repaid out of the plants profits over a long term. The IDC is all about creating startups. Dont think they will gouge us.

It seems that electrolyte production around the world is already carved out. China - Asia, America - the Americas. (USVanadium, 1st player, gets its V from Indian sl@g.) Australia the Pacific - self supplied. BMN - Africa. Europe its self using Largo or BMN vanadium until Russia is kosher again. As the recent contracts of USVanadium with cellcube and IES? suggest to me that electrolyte wont travel, it will be produced locally.

Yes you are right, my apologies. Should use my glasses. I'm impatient to see Vanchem achieve the same.

@Lindon Fortune said they would keep a significant interest not control. I think it will be achieved by selling BE for cash and shares. Like we hold in Mustang. We benefit as shareholders at the highest level but have little influence and no liability to future fund raises.

Record amounts were spent on renewables this year and more is expected to be spent next year. Most of this is wind and solar generation, storage is still slow in being integrated, but it is the next logical step. VFRBs is the current technology and should be a part of this initial take up, but cost could be its Achilles heel, and mean a short window before it is replaced by cheaper technologies.

I bought into BMN for the vanadium, the energy side was a bonus, but I can see the effect it will have when orders come in. The mark up on electrolyte cant be much more than costs plus a modest mark up. As the cost of V is so high, they cannot over do it as the costs become prohibitive. So I do not expect too much here, but it is another value added product. Competition from China will keep prices down.

Demand for steel is to rise by 4%pa to 2050, so we should be able to sell what we make. I am interested to see the rise in sales from this point, as we are still selling the same amount as last year, and holding more inventory than I expected, but not an issue at this point.

The issue is costs. Kiln 3 is not up to speed yet, so there is delay and added cost. Vametco's have gone up to $28kg. Inflation. We are lucky that V prices are high. I pray for higher! Fortune has still to prove that costs are going to be cheaper next year and actually show a good return on revenue. So the wait continues.

On paper BMN is still worth more than its share price but we are in a bear market so no idea when this will turn.

This is your link copy & pasted from page 3 of the BB chat pages, but I just checked and they have not changed anything.

You see what I mean with the 23/24 figures. Impossible. And they are supposed to be in the know. That guidance of 31p is at 5000t + rates, so next year.

https://www.bushveldminerals.com/wp-content/uploads/2022/08/Bushveld_results_2022.pdf

Well here’s my current med term outlook – Ben’spangled! (until they update their model) .

The problem is cash flow and low profitability with the potential to drag on for a few years as the company expands and profits are ploughed back into the business. Recessionary fears are not helping. Inflation is adding to costs, but - “Inflationary times are always positive for commodity prices and as such we can expect that current metal prices will be resilient and will possibly increase over the coming years.” – Colin Bird AFP Thu 30th Jun 2022 – Not that I rate him much, but I know some of you love a reference!

2022 Group H1 Sales were 1644mtv producing EDBITA of about $21M, (Avg costs (C1) $31, Sales $44? waiting on half year results). Other costs always seem ridiculously high so $10+ per kg seems in the range, leaving very little actual profit. I wonder if the high C2 cost is diesel related. H2 is only going to be marginally better even if we get up to speed on kiln 3 today if load shedding persists. This is critical. Will sales rise in H2 to match production? Need to flog an extra 1000t somewhere.

2023 Costs will decrease next year with higher production rate of 5200t. Inflationary costs are likely to see C1 rise by around 10% to $25kgV, imo, or a weakening $ could add another $3/5 to that. Sales will have to move up to match production levels to produce the profits we all expected and V price $46+ to generate enough cash for Orion. They probably will have to sell something as FM said.

2024 onwards will see BMN spending money again if circumstance permit, and they have any. Production should not be affected until the Vametco upgrade. Loss of all production there when that happens, would be nice to know the estimate they have for the downtime. Sales may lag production so benefit not realised until 6-12mths after each upgrade. What value will the market attribute to BMN during this phase? I assume an avg of 5000 mtv of annual sales for 24/25/26, then increasing.

It is clear that if the company was debt free with normal maintenance capex and production costs and much better C2 costs, and assuming they sell healthy quantities of vanadium in any form, they will make healthy profits. Still seems the most likely outcome to me, but it drifts further out all the time. Another 3 – 5 years. That is very frustrating never mind waiting for the market to give us a fair value now. Sorry if it seems gloomy, I’m tempering my expectations, as to date I’ve plainly over expected the arrival date.

A high V price is needed, and I think that it is the only publicity that is going to shift the SP!

Thanks.

I see Spangles Cost of Sales is linked to production rate not sales as it suggests, so production costs + sales? Makes sense to me now. Doh!

Its the C2 costs that is upsetting me. Seem way too high and big impact on profits, so just doing a bit of thinking.

Does the customer pay transport costs or does BMN? Up til now I thought customer, want to check.

The reason I ask is SPangles f/cast Cost of sales to increase with volume. Why? - is it delivery costs or increased personnel required to handle it?

By the way - ignore SPangles forecasts - they cant get production volumes right for the next two years, V prices and sales matching the annual production assumptions are misleading imo.

MM’s need to sell shares, like any commodity. They don’t make money on idle stock. People are generally not buying or some heavy sellers, it is inevitable that prices are dropped as the stock is shifted. They don’t what to be holding stock especially in a falling market. So price has no bearing on how good the product is. Value. That is for you to judge. Risk/reward.

If you bought high, well tough, that is the risk. Buy sell or hold, is your decision. You have to constantly monitor the story and price and make a decision to stay or go, esp on AIM. If you stay, you adjust your expectations accordingly and accept responsibility. Don’t blame anyone else for being locked in. You failed, not the BOD! Your expectations were wrong.

There is no doubt that the company has expanded. Profitability has been hampered by vanadium prices, major upgrade and increased maintenance costs, covid, debt repayment, investment into VFRB – E.plant, Cellcube, Vanitec, mini-grid, etc. But now, with the exception of Orion’s remaining debt, delayed to 2023, we are a 5200t producer just starting to make a healthy profit.

America seems to be our new market. China markets are suppressed due to covid. We may lose that business to Russia, but they do have a large appetite for vanadium. Europe is in a bit of a temporary crisis due to covid recovery and Ukraine, but I expect steel production to increase next year. This and USA will be the main markets and later, Africa. VRFBs are going to happen, but may not be significant for another couple of years, but the evidence points that way. Price of V will rise and so will profits. This is what the last three years have been all about. Increase production and sales.

If you look at the big picture you will realise that this is all coming together and this is a bargain entry price. Say the Chinese offered to buy the company in a fire sale tomorrow. How much do you think is a fair lowball estimate of the mines and plants and equipment, as a going concern? Exclude BE and electrolyte plant. Just a rumour of this would send this back to the 20’s - 30’s in an instant.

You never know what is round the corner, but happy to hold and add when possible, for now.

Demand and lack of supply is forcing Li prices up. Diesel costs are forcing companies to look at alternatives. VRFB’s become competitive over a longer time frame or larger projects. The high residual value of the battery means financing is actually easier, eg leasing alternatives. Insurance costs are now biting into Li projects because of the historical fires. Safety and re-cycling will become major factors in decisions about type of storage.

VFRBs will take off, I have no doubt. We are starting from virtually a zero base line. Costs will fall once the infrastructure builds. That is what the IDC is trying to do. I believe take up will follow the same timeline and trajectory as solar cell and wind power has taken. Slowly and then exponentially. Oil may transition into this and other technologies, accelerating the development of the industry. Governments may subsidise new projects in order to maximise efficiencies from currently installed green generators or to replace gas and coal generators. They may give out grants etc. to assist in a similar way the IDC has. Still a couple of years away though.

What did the recent VRFB forum conclude?

Lindon described the situation very well. I think BE achieved its aim of jump starting the VFRB industry, but it is probably unrecognised as it never produced anything directly. Investment will be required that BMN cannot afford at this time. It makes sense to focus on the vanadium business now. It is after all where the most money is to be made.

BMN and Garnet needed to find a third party to join them in Enerox to ease the tension between them. I can see Mustang being that solution and also the vehicle to raise cash for Cellcube. BMN is removed from the picture and any further financial commitment, as now only a shareholder in Mustang. It may be Acacia sells it control to Mustang at the same time, so Mustang own 100% of VRFB-H and 50% of Cellcube?