London South East | The UK's favourite investor portal.

What I am essentially attempting to communicate here is that if a partnership is required for those Eskom batteries, BMN will achieve it,and achieve it on their terms, because they hold the majority of the cards here, and that is why BMN are so stable in their comments regarding partnering with "different VRFB companies" because right now BMN and their VIP model, is the very best offer on the table for the vast majority of VRFB OEMs, and that lack of opportunity drives far better deals for Bushveld Energy, however fair they may look on paper.

Bushveld MInerals drive to secure Vametco is continuing to demonstrate its worth and act as a lynch pin for all the deals that have and are continuing to follow it, be it that as always, time is needed for it to truly starting paying us all.

(2 of 3)

So BMN are planning (and no doubt already achieving far more than we know) to vary their offering to the thirsty and very much needy, VRFB manufacturing industry, based on what works best for them. By doing so they create competition within their own partnership network, which can only help Bushveld Energy's efforts at securing stronger deals in the future.

The beauty of all this is the fact that Bushveld Minerals, due to a number of reasons, has first mover status on the whole VRFB manufacturing chain outside China.

The greatest reason of all is the vanadium price itself. The very thing that is holding back the share price today. Shrt term that smarts a little but medium term, that should pay great dividends because no matter what the potential pure plays say (those being the ones that are near or ready to be financed but have nit achieved it yet), they are going to struggle to obtain finance in a falling vanadium price market, particularly one that has seen such dramatic volatility. Financers do not like that.

Add to that Largo Resources, who with a chain around its neck the size of Glencore, has not been able to enact the sort of changes to its business model that Bushveld Minerals, now finds itself 3 years into. That is if Largo are or were ever so minded.

So in essences, and things are never truly that simple, Bushveld Energy through the work of its founding father BMN, has a very strong hand with which to play the VRFB field.

We have talked about this many times, many moons ago. That BMN through its ability to step into the inner circle of vanadium producers, is now inside looking out, and outside are struggling to find a way in. That makes BMN's position a very strong one. However, even more telling is the fact that there really aren't that many options for VRFB manufacturers out there and right now Bushveld Energy, is the very best option because it is willing to do what it takes to support VRFB OEMs, because it wants the demand that comes with that.

So for me it has never truly been about what the VRFB manufacturers want. It has always been about what does BMN want? Who does BMN want to partner with? and the deal with ReDT/Avalon demonstrates that very clearly.

The only question mark I have is UET (despite my assured view on their involvement in the Eskom BESS project) because they have a very big Chinese partner and potentially electrolyte security.

However, what they do not have is a South Africa based partner with access to the levers that pull S.A. politicians and regulators into line.

(1 of 3)

With regards to the upcoming Eskom BESS Project, the VRFB strategy RNS has a very clear tell in it.

"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."

One could make an argument for Bushvelds Energy's part in the BESS Project, being one of "large potential customer development" only. However, I tend to lean heavily towards the "joint development" element of that statement, because that lends itself to project level collaboration, and I simply cannot see Bushveld Energy giving up the chance to be a part of the development team. It would give them so much kudos and demonstrable experience, that it is an opportunity that really must be taken.

The fact that this statement comes under the umbrella title of "Clear strategy to partner with VRFB companies" but more importantly the statement that says ;

"VRFB OEMs are the critical drivers for the success of the VRFB technology and vanadium demand in energy storage. A key activity for Bushveld Energy is developing partnerships with VRFB OEMs that can take the form of multiple structures, including:"

So there is a definite indication that there is a partnership to be had (be it that one must be had in some shape or form), when Bushveld Energy enter the race, in whatever form that ends up taking, for the Eskom BESS Project.

However, as I say, I see Bushveld Energy as a developer in this project, but perhaps with several sideshows running at the same time.

These sideshows are hinted at in the wording immediately before the statement on "large customers or projects."

"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."

The region element may well go on to be a South Africa/SADC wide vanadium electrolyte rental model, that enables BMN's VRFB partner in that region (See Note 1), to be able to take full advantage of said product, in partnership with BMN and the IDC, to deliver a potentially unassailable bid for the Eskom BESS Project.

Note 1 - My money remains on UET for this role because introducing anyone else's product would undermine the work already conducted at Eskom's Rosherville, which is noted in the RNS along side the joint development statement.

This strategy of sharing themselves around is further supported by the statement that ;

"By partnering with different VRFB companies, Bushveld can diversify its vanadium customer base and support various technologies, maximising its exposure to VRFB upside potential."

(1 of 2)

Yesterday I wrote a series of posts centred around BMN's investment into the ReDt/Avalon merger.

After conducting some background reading on the merger, I find myself becoming all the more intrigued by the following set of statements, made in the follow up RNS entitled "Strategy for partnering with VRFB companies."

"Establishment of a new VRFB Investment Platform ("VIP") to make strategic investments directly into VRFB OEMs that offer strong growth upside and provide potential off take for Bushveld's vanadium products. 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."

In their original "proposed merger" RNS dated 25th July 2019, ReDt stated the following "redT and Avalon have received substantial preliminary support for the Fundraising from a strong new strategic investor that intends to make a cornerstone investment in the merged business."

Now that cornerstone investor is not Bushveld, because its VRFB Strategy RNS goes onto to state ;

"Bushveld's role would be that of a significant minority investor, with strategic involvement such as vanadium sourcing, while keeping the day-to-day operations in the hands the management team."

I stated yesterday that for me this was a circa 10% shareholding, which enables them to maintain their place on the board for the long term, and cements their +5% over the longer term (further ReDt/Avalon dilution anticipated), in order to maintain their first refusal status on vanadium supply.

Most importantly, BMN are stating very clearly that they are not the cornerstone investor.

Now for the interesting partt. BMN go on to say that ;

"The Company intends to leverage its initial capital commitments by mobilising additional third party capital to create sufficient capacity to play a meaningful role in scaling up VRFBs manufacturing capacity."

So we have a World Bank esc situation arising here. BMN contributes a "significant minority" stake in order to encourage further more substantial investment, from sources that perhaps need the risks to be lower, in order to play the game.

The ReDt RNS from 1st Nove is clear.

"The Interim Loan will enable redT to complete the due diligence process, finalise the negotiation of the Merger and progress the Fundraising. redT's Board expects that, with the Interim Loan in place, the Company and Avalon will move swiftly towards completing the Merger and the Fundraising and, as a larger and financially robust business, embark upon its exciting development and growth strategy."

So the BMN loan takes a big risk off the table, capturing the merger and its costs, which are likely to be unattractive to larger corner stone investors, with the message being, get your house in order and then we will pay to play.

(3 of 3)

Furthermore, the RNS is clear ;

"Subject to Bushveld continuing to beneficially own at least 5 per cent of the ordinary shares of the merged entity for one year from completion of the Merger and the Fundraising, it will have the right to nominate a member of the board of the merged entity. Bushveld will retain that right after one year provided it beneficially owns at least 10 per cent of the merged entity. In addition, for so long as Bushveld beneficially owns at least 20 per cent of the merged entity it shall have a right to nominate two members of the board of the merged entity"

The terminology is not clear, but c. 1-2 year after the merger completes, BMN need to be above 10% ownership in order to maintain their member of the board. The fact that the RNS even mentions that 20% ownership would lead to 2 members being on the board, for me signals a strong intent to take advantage of this opportunity by more than just 6.99%.

BMN may nor choose to add to their holding immediately. Choosing instead to wait and see and make sure that it is all working out. However, my view is that BMN continue to demonstrate their strong belief in the future of VRFBs, through their continued actions. So in my view, a further 3% (c.126m shares) commitment at 1.65p, at £2.1m ($2.66m), would be a very worthwhile investment opportunity, and so the button may well get pushed on that additional investment. Hunter not Hunted.

With this deal, BMN are demonstrating further foresight and their ability to act, in a world of VRFB manufacturer that, despite the early signs of success, is and will continue to struggle, unless it can find willing and able partners, such as BMN.

In being that willing partner, BMN can take strategic positions on what are technologically very solid VRFB manufacturers, knowing that a guaranteed and cost effective vanadium supply, can really open up these businesses to growth.

Of course it is not all about winning, but WIN/WIN. The company receiving the benefit, needs to feel there is benefit to be had. So the deal isn't too harsh in its make up but it recognises the risks involved for BMN and rewards it both through ownership and guaranteed, preferred business.

To place that in context, ReDT in their interims stated that with just a 16% hit ratio on their pipeline of work, they would have a circa £200m project portfolio. That 16% was stated prior to the merger, prior to economies of scale and cost cutting, and prior to the largest owner of high grade vanadium in the world, coming on board.

10% of that plus the supply contract, is a very big deal indeed.

Long term BMN shareholders have ridden enough storms and felt enough heartache, to justify their place at this table, such that becoming the hunter (as fair a hunter as they may be), is well earned.

So the feast that was Friday is to be rejoiced, be it with hommage paid to those that weren't/aren't able to enjoy it in quite the same manner.

(2 of 3)
Better still, this deal then also secures BMN the right to make a further investment into the merged business, at the price agreed for the fund raise, so 1.65p a share.

Right now ReDt has 951m shares in issue and will be valued is, courtesy of the fund raise, being valued at 1.65p a share. So £15.7m.

Avalon is being valued at $37.5m, which based on the fund raise conversion rate ($1.28 per pound), is £29.3m.

At the stated 1.65p conversion, that equates to 1.775 billion new shares.

The we need to add in the proposed new funding, of which $5m is coming from BMN, all of which comes in at 1.65p a head. So that's another £23.437m @ 1.65p = 1.42 billion new shares.

Therefore we have ;

951m shares in issue + 1.775 billion RTO for Avalon + 1.42 billion fundraising shares.

Then we have to add in the interest and commitment fees due to BMN of $1.2m (£937,500) = 56.82m

= 4.202 billion shares in issue, of which BMN would hold 293.56m or 6.99%.

19.35% of that total 6.99% (so 1.35%) is being achieved purely because BMN has the money available to lend to two companies, whose need is sufficiently great enough, to warrant a substantial set of fees/interest.

Said 6.99% ownership automatically places BMN comfortably above the required 5% ownership level, which triggers the full clause that stipulates ;

"A right of first refusal to supply vanadium, vanadium electrolyte and vanadium as a rental to the merged entity for two years and thereafter subject inter alia to Bushveld continuing to beneficially own at least 5 per cent of the merged entity

However, as the terms state ;

"Bushveld also has the right, but not the obligation, to invest further into the merged entity on the same terms as other investors, at a maximum price of 1.65p per ordinary share."

So BMN can increase its stake in the merged entity if it so wishes, although a deadline to do so is not communicated.

At 4.202 billion shares at 1.65p, the merged entity would be worth c. £69.3m.

For me this consolidation exercise demonstrates an ability to cut costs across both businesses and adds substantial cash reserves to fulfill both companies current project pipeline obligations, which in the case of ReDt is substantial. So there is substantial future value to be had there, particularly with such a strong and cost effective supply chain partner, as BMN. When we add in the fact that said partner has a fully functioning vanadium rental product with the most dominant merger partner, Avalon, then there is scope to appreciate that a further investment at 1.65p, is a gift, generated by being a hunter and not the hunted.

(1 of 3)

There was once a time when we mere shareholders were set a near daily task of defending the virtues of BMN, its directors and the financial deals they were able to reach, in what can be a torrid and unforgiving AIM market.

I can look back with fondness now at the many hours of work put into defending something I knew to be true, to be right. Against those that knew very little about it personally, but felt secure enough to beat it, with every relevant and well tested stick at their disposal.

Bushveld Minerals was the hunted, simply because it existed and was surviving.

Jump forward 4 years and the hunted becomes the hunter. With the announcement of the deal to support the RTO of Avalon into ReDt, and make no mistake, that is what is happening here. ReDt may be buying Avalon for $37.5m but it is Avalon that holds all the cards. That said the 2 companies certainly need one another. As Bushveld Energy themselves alluded to in their Energy Storage 101 presentation (slide 29), Lithium-ion cell production is concentrated, VRFB production is not.

VRFB production does not currently have economies of scale to assist its component costs, nor to date do many VRFB companies have a low cost vanadium producer at their back, combining their abilities to deliver a costs competitive product, to rival that concentrated lithium-ion manufacturing.

So the example of consolidation we are witnessing with ReDt/Avalon, is a natural processs in the cycle, as VRFB companies that have tried to compete on their own, come to the realisation (be it in ReDt's case forced), that they need to be bigger to be better.

Having gone through all the pain of being the hunted, surviving it, rising out of it, Bushveld Minerals has literally earned the right to employ its capital to take advantage of this situation.

The deal with Avalon (and that's what it is, it is assistance to take over ReDt, hence why the loan is to Avalon, the entity with sufficient assets to make the risk worthwhile), is a potentially very lucrative one.

The loan is for $5m but comes with a whopping 20% commitment fee, and of course interest at 12% per annum.

What that effectively means is that when the merger completes, BMN will have the right to convert all of that cash into shares in the new merged entity.

From the RNS

"The terms of the Interim Funding include provisions that, on successful completion of the Merger, the loan will convert into shares in the merged entity."

"Interest and commitment fees will roll up and convert into ordinary shares on completion of the Merger"

The merger is expected to complete in Q1 2020. As an example, if the merger completes at the end of Feb 2020, then BMN will earn around 4% in total interest, which equates to $200k.

That would mean that BMN would convert a total of $6.2m into merged entity shares, for what will be a 4 month loan.

That's a 24% return.

Firstly, a hearty congratulations to those posters that predicted this move, I certainly did not see it coming, so hats off to you.

Some key quotes if I may ;

"A burgeoning project pipeline that will allow the merged entity to achieve the economies of scale essential for cost-competitiveness quicker; to increase investor confidence; and to raise the bankability of its products and projects."

Couple that with ;

"A right of first refusal to supply vanadium, vanadium electrolyte and vanadium as a rental to the merged entity for two years and thereafter subject inter alia to Bushveld continuing to beneficially own at least 5 per cent of the merged entity"

The agreement of the rental model with Avalon was always a signal that there was a relationship there, I just never thought it would lead to BMN investing in both it and ReDt Energy, although it makes perfect sense.

Given that the rental agreement exists and is proven, that "burgeoning project pipeline," particularly on the ReDt side of things, is about to receive a double shot of competitive advantage.

From what I have witnessed, ReDt never had a problem achieving contracts, it was the cost of closing them out, that was their ultimate downfall.

The introduction of a rental product and the security of vanadium supply, at a cost that is competitive, enables those contract winning skills, to be supplemented with just the right sort of commercial support, that was always missing from the ReDt model. The 3 together should make for quite a potent ****tail, at a time when energy storage is far more prominent.

"Subject to Bushveld continuing to beneficially own at least 5 per cent of the ordinary shares of the merged entity for one year from completion of the Merger and the Fundraising, it will have the right to nominate a member of the board of the merged entity. Bushveld will retain that right after one year provided it beneficially owns at least 10 per cent of the merged entity. In addition, for so long as Bushveld beneficially owns at least 20 per cent of the merged entity it shall have a right to nominate two members of the board of the merged entity"

BMN certainly look to be laying the foundations for a significant stake, in what will be a significant player in this industry. As Larry Zulch, CEO of Avalon Battery, commented:

"Avalon and redT combine to create the world's preeminent flow battery company."

With the owner of the world's largest high grade vanadium resources behind them, their ability to achieve that and handsomely reward their new partner, has certainly received a significant boost.

In my last set of posts I said the following ;

"What matters is that everything that BMN needs to expand and give itself the very best chance, in both its traditional markets and new energy storage driven ones, is now there. It is just about time and patience to see it through because after the latest set of news releases, it is all in the hands of BMN management, and to date they have been very safe hands indeed."

What I did not expect is that said developments were being known to the market at the very point that I was writing those posts.

As I said earlier, the major developments of last few weeks,

1. Vanchem finance,
2. Mokopone Mining Right,
3. Early Settlement of YD earn out,
4. Debt facilities,

Have all given BMN the necessary security and control, to allow them to push on with their plans, without having to wait further on anyone else, or indeed maintain risk on the books, that cannot be entirely measured.

It is no surprise that the removal of the YD earn out was closely followed by the debt facilities, because it reduces the burden on the balance sheet, and thus opens up the opportunity to take on debt in another form, so a very necessary and welcome piece of controlled and minor dilution, because it opens up far more than it takes away.

BMN have not messed about, as those proverbial red buses continue to show up in their droves.

I still need to look at the details and considered what I believe to be the outcomes of these moves, but I do find it rather ironic that it is ReDt Energy of all companies.

many years back there was much heated debate over the future of both companies, and at times the battle between shareholders of both companies, became a tad bit unsavory. However, my view point on ReDt never wavered. I could not see how their then current CEO, could make such strong claims that vanadium was so abundant, that they would never have an issue with supply. My own view at that time, based on the research generated through owning BMN shares, was that survival was dependent on securing a vanadium producer as a partner, and there really weren't many of them around to choose from.

Jump forward 3 years or so and that now significant, well established ad therefore sufficiently prepared partner, and soon to be partial owner of ReDt , is one Bushveld Minerals.

A wonderful example of how achieving production and cash flows is the most expensive part of any public company's life cycle, and what achieving does for the growth and value of the company moving forward.

Congratulations BMN, your time is certainly now.

@Heidhoncho With all due respect, you appear to be taking my post a little too seriously, be it that I am normally always serious in these matters.

I did make it clear that " If nothing else I enjoy the art of trying solving the problem."

Also at no point did i say it was anything but my opinion. Hence why I said "This is however merely my opinion, and should be taken as such and no more."

What your post has highlighted though is that I made an error in the 2nd part of my post, because it does not match with the earlier explanation, in part 1.

Key dates should have read as follows ;

Key Dates.
3rd November anchor handlers set sail.
5th November anchor handlers complete move.
8th November spud
27th November preliminary result if duster.
1st December if oil found.
7th December Borgland Dolphin sets sail for home.

For the record, the above dates are deducted from an analysis of the actions that took place over the first 2 drills, of all which is available through a history check of I3E tweets, across the period.I have not made these duration's up but have had to make minor assumptions where things have changed.

For instance, the anchor handlers arrived at Liberator late 28.09.2019 after setting sail early afternoon. They then commenced operations early on 29.09.2019. They then commenced leaving the Serenity site at around 12pm on 30.09.2019. I know because the main tweets from that period, that I have employed, are my very own, because I monitored everything very closely.

So the full operation from port to completing anchor operations at the Borgland Dolphin, and then leaving for port, was circa 48 hours.

It is not enthusiasm that I have employed but logic deduced from actual operations.

The only additional travel time that needs to be factored in, is the anchor handlers travel to the Borgland Dolphin at Serenity, because it is 10km further north. It is however fairly insignificant in the grand scheme of things, because the 3 boats in question travel at 11 knots per hour. I know because I have tracked them.

As I have stated in my post "we can never be entirely accurate with these things because each drill is unique and things can go wrong or change." So I recognise that the exercise has tolerances and could be out if things go wrong or change path.

However, with all due respect, i find your "temper your enthusiasm" comment rather distasteful, because it belittles the process and details that i hav employed, be it the exercise was designed as a problem solving exercise only (which I made very clear), and should not be taken to be what will come to pass. Still my distaste stands.

(3 of 3)

In my opinion, all of those plans remain well within reach and under BMN's control.

So even at low vanadium prices (assuming for this exercise, $30 remains the norm for the shorter term), BMN have sufficient cash resources to grow the business over the medium term.

By the time we reach the close of 2020, BMN should have or be very close to 5,000 mtV production, a operational/close to operational electrolyte plant, a completed DFS on Mokopone and started construction, as a minimum. That would be considerable progress from where we see ourselves today.

With regards to the Mokopone costs, reported to be $20m, it is important to remember that BMN will 'only' own 57.6% under the revised ownership agreement. It will be interesting to see how and when payments for its development are made, but at the very least BMN should recover its costs through profits, once in production. So BMN's bill is actually closer to $11.5 rather than the full $20m.

So all in all, whilst this lower vanadium price environment is certainly having a concerted but understandable affect on the BMN valuation, the reality is that it does not affect the key expansion plans of the business, which remain substantial, and that is what truly matters to long term holders.

I do believe that we are about to enter a downward cycle in the world economy and that will means that stocks that are considered to be cyclical, which BMN is until it proves otherwise, will suffer for it.

However, during that cycle, BMN are demonstrating that they have set themselves up financially to not only cope with it, but to take advantage of it, and like the proverbial caterpillar, rise out of it as something far more beautiful and complete.

Cycles are just that, and they come to an end. Even if BMN somehow fails to capture the energy storage market as it is clearly set up to do, then if nothing else we will witness a meaner, leaner and far greater beats of a BMN, when the cycle turns. One that has far more reach and clout in that post cycle world. However, that is the minimum for me.

What I see is that very same beast blossoming into a major energy storage player, which given what is now happening in South Africa at Eskom, has the ability to demonstrate those energy storage capabilities far earlier, such that a cyclical downturn, may not be able to control its rise, if the market is able to understand and appreciate what such a move would mean for BMN and its risk profile.

However, that doesn't really matter. What matters is that everything that BMN needs to expand and give itself the very best chance, in both its traditional markets and new energy storage driven ones, is now there. It is just about time and patience to see it through because after the latest set of news releases, it is all in the hands of BMN management, and to date they have been very safe hands indeed.

(2 of 3)

I will assume Q3 c.700 mtV sold (given the inventory has grown fairly significantly this year). If they achieve the $30 per kg mark, and at least maintain the $21,600 operating cost, (which is low but we are talking 100 mtV of additional sales, which will share out the operating costs more) then Vametco is capable of generating c.$8,500 per mtV in EBITDA.

At 700 mtV sold we are talking circa $6m in EBITDA. So not great but adequate enough to keep Vametco, BMN ticking over, and that VRFB that Vametco wants.

Now here is where is gets interesting for me. Up to the point that BMN completed on Vanchem, they had to carry the full costs, meaning no tax deductions or incentives.

The closure of the Vanchem deal plus the receipt of the Mokopone Mining Right, now give BMN now opportunities in terms of tax deductable investments in the business, plus they should now have access to the 12I Tax Allowance Incentive scheme (see link below), which I have discussed here several times before.

The key and certainly the most testing part financially, was obtaining the asset and the Mining Right.

If I park the Q3 earnings at Vametco and call them working capital only/debt payments, then BMN has a good run at that debt facility boosted $43m figure.

https://www.thedti.gov.za/financial_assistance/financial_incentive.jsp?id=45&subthemeid

In terms of Mokopone, the only cost the company has to worry about over the next 9-12 months or so, is the DFS, which being "feedstock supplier to Vanchem" only (see RNS dated 21st Oct), should come in well under the original $7m stated for the full Mokopone scheme.

I would suggest that $2.5m would likely see it home.

So we are at $40m.

With that $40m BMN has a free run at expanding Vanchem production. The total bill is $45m for a 5 year programme, but as I have offered here previously, i just do not see the biggest costs being required upfront. Instead I see the same pattern as we saw at Vametco, be it there are 2 more kilns at Vanchem and we do not actually know their current condition. Nevertheless, it makes logical sense to up production by the easiest means possible, first of all, in order to drive greater cash flows, to service the bigger ticket items later.

At $40m BMN has plenty in the tank for this.

With regards to the electrolyte plant, whatever the actual programme turns out to be, BMN have made it clear that this will be built with a combination of debt and equity. At just $10m total costs and likely 50% ownership, we are talking just $5m and I expect that to be a loan from the IDC. However, even if it ends up being 50/50 equity to debt, then its well within the reach of BMN and their $40m cash pile.

So that's the electrolyte plant, phase 1 of Vanchem and Mokopone DFS secured.

In addition to this, BMN will want to service VRFB projects/electrolyte rental contracts, and likely set up VRFB assembly, all in 2020.

(1 of 3)

Morning all,

Having looked at the latest financial updates from BMN in regards to the Vanchem deal and the, as expected, debt raise, I would offer this ;

From the Interims, we can see that of the total net cash balance of $66.1m, approximately $25m is designated as "non-controlling interests."

As I have stated previously, the MO of this company, for me points towards employing a safe position, in terms of that non controlling interest. Therefore, I discount the availability of those funds until such time further supporting evidence comes to light.

So for me the net cash pile for BMN started at c.$41m.

By the time the interims were released, the $6.8m of the total $30m cash payment being made as part of the Vanchem deal, had already been paid out.

So we need 'only' deduct the remaining $23.2m.

That places BMN net cash at c.18m, as of 30th June 2019.

In addition to this we can now add in the debt facilities reported in the RNS of 30th Oct, which is give or take a little, $25m.

So now we are at $43m.

Since the 30th June, Vametco has of course continued to generate cash flows.

In the Interims update, there was an strong indication as to how Q3 will have panned out prices wise.

There the company stated ;

"Ferrovanadium price averaged US$56.3/kgV in H1 2019 (H1 2018: US$65.5/kgV).

"Year to date average ferrovanadium price of US$48.2/kgV3."

The 3 on the end of the last sentence being a note, which itself said "London Metal Bulletin year to date average as at 20 September 2019."

BMN pricing actually runs 1 month prior to the actual date, which places the end of Q3 at circa 31st August. However, as prices have not moved too significantly between 31st August and 20th September, the use of said average price is worthwhile, for this exercise.

If the average price to 30th June was $56.3 per kg and by 20th September YTD was $48.2 per kg, then the average price between 1st July and 20th September was $30.30 per kg.

This is calculated by taking the YTD days of 263 x 56.3 = 12,676.6 and subtracting H1 181 days x 56.3 = 10,190 = 2,486,60

Then dividing that sum by the days in H2 = 30.30.

Now to establish the EBITDA, for me it is best to employ the Q2 figures, where performance can be measured against lower vanadium prices achieved.

In very simple terms BMN achieved actual prices of $49,400 per mtV sold in Q2 (revenues significantly higher than average V price stated), and EBITDA of $27,840 per mtV sold. So overall operating cost indicated at $21,600 per mtV ($21.60 per kg)

Now the reality is far more complicated than that, because the EBITDA has to take into account the production costs of the 135 mtV of production in Q2, that did not get sold. Plus we likely have sales and realised EBITDA overlapping quarters. But we have to start somewhere.

Latest Share Chat

Member Info for BigBiteNow

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Latest Share Chat

Member Info for BigBiteNow

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Please enter at least 2 characters

No results found

Search results

Recently viewed

Trending