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@Pickedpeck. Yes a little further reading and I see that the formal offer document is to be issued within 28 days of the announcement but the offeror may only publish an offer document within the 14 days following the announcment if the BOD (AMER) of the target company consents.

So yes potentially the number of days could be reduced by, in theory, upto 28 days. That would make the total process 74 days.

However, that is still only 7 days less than we have in the remainder of the year. So either the offer is about to land and/or AMER have their offer(or) and so are confident that the process will move in line with the Takeover Coderules (as stated).

Unless of course another counter party steps in within the first 39 days, which would force them to announce a further change to the process, which right now is not under their control, which further supports their wording today.

As I understand it to be, according to the Takeover Code, day 0 of the process is the day when the offeror announces their offer. There should then be 28 days for the offeror to send out their offer documents to shareholders (Day 0).

There are then minimum 74 days until the "earliest date" the process can be deemed to be closed. That makes 102 days.

There are currently 81 days until the end of Q4.

So something doesn't add up. I welcome thoughts on this but if the Takeover Code rules are to be followed, then a Q4 finish is unlikely, even if a second bidder doesn't come in and disrupt the flow of the timetable. If the y do then the process would be extended. However, once that first bid is tabled formally, then we will at least be able to then see how thing are starting to pan out.

@ColonelDrake I am not fully on board with the all cash offer conclusion. Rule 2.7(d) states ;

"Where the offer is for cash, or includes an element of cash, the announcement must include confirmation by the financial adviser or by another appropriate third party that resources are available to the offeror sufficient to satisfy full acceptance of the offer."

So a cash and shares offer is still on the table although I do think that the AMER BOD want their cash and nothing else.

We must not rule out the possibility of one party buying the whole business and then immediately selling off one part (eg. CP0-5) to another interested party (eg. ONGC).

OXY have form on this with their recent takeover of Anardarko when they sold off the Mozambique assets immediately after the sale. So I would caution on ruling anyone or anything out at this time.

ColonelDrake Yes I tend to agree with your way of thinking. This RNS is designed to first and foremost confirm that the sale is, as far as AMER have witnessed to date, going to happen.

Secondly, they have received sufficient encouragement from 1 or more parties to enable them to push for a full sale.

Note - I believe that this was always the case here despite what AMER said at the beginning of this process. That was in my opinion, merely a tactical move to drive the process and the end price. Furthermore, i continue to suspect that AMER have a core buyer involved here (possibly as you say OXY), and that it is they that are driving these words.

That doesn't mean that the other bidders aren't real or interested, or indeed that they won't win out. Its more a case that their is a preferred bidder who is perhaps prepared to meet the lowest acceptable bid for the BOD. I have no evidence to support this theory, it is merely my feeling.

Thirdly, the fact that AMER are still saying that shareholders "are encouraged to take no further action with regard to their shares," indicates strongly that the anticipated final price will be higher than the 17p offer from M&P. We have all suspected that for some time but at this stage, given the confidence that a full sale will be completed, it carries far more weight.

So as it stands, we have a full sale by Q4 (as suspected given the timing of the presentations) and it will be above 17p.

It is interesting how the price was pushed higher through yesterday. It indicates a leaky ship, which is disappointing.

It

@icepick. Thank you for posting, I hadn't seen the video before.

Its a very insightful interview with the CEO that provies some good insight into how this is all going to pan out, particularly when it comes to the finance for both the Coringa payment and its construction.

On the final Coringa payment he says ;

"We have a final payment to full acquire Coringa at the end of the year. We've basically got that in the bank, which is good. So we are just basically trying to build up as much cash as we can before the end of the year."

On the Coringa construction costs ;

"We have got a great relationship with Sprott Asset Lending"

"We borrowed $8m (from Sprott) and paid back $8m out of cash flow"

"We earned a huge amount of trust with these guys and they are absolutely ready and waiting, when we are ready permitted with Coringa, to do a lot of that with debt"

With the permitting expected to be due by the end of the year, SRB potentially has all of H2 cash flows to help support that debt raise. Plus , as I have discussed here previously, construction is not expected to start until Q3 2020, and so the cash should keep rolling in to support those efforts on debt.

Plus with fairly limited debt on the books right now (circa $6m from Sprott), the company should have a substantial asset base (Palito and Corings) with which to raise the debt against.

This is supported further by the ore sorter at Palito coming on line at the start of 2020, which has the ability to bolster output by 20% and further cut the AISC for the mine.

As I have suspected for some time, SRB (supported by high gold prices of course), look to have a very good handle on the finances required for these two major events, which could assist them with avoiding further dilution completely.

I really like this story and what it can offer me as an investor over the next 2-3 years. I do not see gold dropping back significantly now. If anything I see it pushing on in 2020, which would only offer further support and interest for SRB and its valuation.

It really should not be about guessing. It is absolutely clear that I3E are stating that they believe Tain and Serenity are connected. They have also had access to the 4 drill results from Tain and the read back to the Serenity prospect is demonstrating that connectivity.

In the Serenity Prospect PROSPEX on the I3E website, they state ;

"A strong amplitude anomaly is observed at top Rodby"

"c.10km of the anomaly lies within Block 13/23c"

"The anomaly is present in the area of the 13/23b-y Tain well but no sonic was recorded"

That is the nearest sidetrack well to the Serenity prospect at circa 1km from the S1 drill site.

There is no guarantee that the two are connected. There is no guarantee they will hit oil. What is guaranteed is that I3E believe strongly that the connectivity is there, and my fact based examples this morning attempt to demonstrate why.

Risk remains here and nothing is a given but personally I very much like what I still see in both the LIB and Serenity prospects, despite what the valuation is currently saying about them, and what the market noise is also attempting to convey.

Truth is if L2 had come in then the excitement in the lead up to this drill would have been far more considerable and the technical and geological realities more readily proclaimed. That result has knocked confidence and I certainly find myself swimming against its flow right now, in what appears to be a very small pool of bullish believers.

Whatever happens, just like I3E, I will stand by the data I had at the time and if given the same circumstances again, would back this for the risk/reward it demonstrates to me personally and not what the noise is trying to convince me it is. That may well come back to haunt me or it may not but as far as I am concerned, this is a good company with a strong management team, who believe they have 2 very strong assets with potentially world class reserves in world class sands.

I believe them because my research to date confirms it, and that is all we can ever hope to achieve, a belief in a investment based on research.

I have talked enough on this stock the last few weeks. It is now time to wait for the next leg of the plan and test that research and belief once more.

I will be back here when there is something new and tangible to discuss. I trust those that decide to back this stock do so because they have researched it themselves and not because they have followed anonymous voices such as my own. This is a discussion board where hopefully useful information is shared, and in my opinion should be judged as such and nothing else.

To whoever decides to push on through this next result, I wish us all well and trust that good research wins through in the end, although unfortunately even that is never guaranteed.

planned to enter production next 'year'

Lets put it another way. As a company you have an asset, which is planned to enter production next and for which you are a long way down the road to agreeing a debt facility for.

You plan 2 wells to appraise that field. The first well fails to hit its target and reduces the level of viability of 1 of the 3 wells you intend to implement in phase 1.

Having raised money and planned for a second well in this field to help define another of the 3 potential wells that you have, what do you do next?

Do you abandon operations and therefore place your plans and your debt facility under pressure? Or do you re-check your data in double quick time to ensure that your 2nd target is correct and then push on to drill that well?

Given what the company has stated in the interims about single well contracts not being available, it is highly unlikely that a company would walk away and then try to come back next Summer.

What you do is double check all your data, gain additional data if you can, and make sure you do everything you can to get that drill completed in this window.

That's exactly what I3E have told the market they are doing and that is in my opinion what they will achieve.

So I am staring at 2 high impact drills here, either of which sends the valuation well above where it was shortly prior to the initial result on L2 on the 10th Sept.

Here it is again. It is the 31st Oct 2018 Proactive interview and can easily be found in a search.

It is the same video I analysed here last week.

It has a lot of very good information that back up just how strong these assets are.

It also very clearly states that the A3 well, at that point, was designed to confirm the LIB upside but also to position the 2nd development well (L4), which they state at the time is a potentially better option than the L1 well.

They do not at any time say L1 isn't viable.

This is why I am so surprised that commentators can so easily write off the LIB phase 1 development, when an appraisal designed to assist with its definition, has still not been drilled.

They have 50% through a process on LIB and yet conclusions are being made about its viability and the phase 1 development. That's simply wrong.

It is also why it is clear to me that I3E will drill A3 after Serenity. They have to because it will provide the necessary data to define what LIB actually is. Why on earth would they walk away from that?

So I expect news on that drill as soon as the company is able to provide it.

2 fully funded high impact drills due over the next 50-60 days and the market is giving them zero respect right now. An extreme example of how this market works and how little it is prepared to research its topics properly.

https://www.youtube.com/watch?v=ut8Ogy-ouAo

@Backwoodsman That is a debate that has been raging now for a number of weeks. Various investors, observers, shareholders etc etc have made their case and stated what they believe and why.

In my view there are various very competent and worthy snippets out there to be found, that are for me strong tells as to what I3E believe they have, in both Liberator and Serenity.

Whether you or anyone else believes them or their worthiness, is for you alone to decide. All we can do here is offer the evidence as we see it, debate it and then individually decide what we believe and act upon it as we see fit.

One clear tell for me is hidden away in the interview from 31st Oct 2018 (see below).

It starts from 3 mins 15s but the key point in relation to Serenity, whereby the CEO Shafiq Majid says ;

"When Neil and Graham originally bought the Liberator block, they knew at that point there was an extension into the adjoining block because we couldn't see a closure on the mapping" (adjoining block then acquired later in mid 2018).

"That's the same with Tain. We have obviously the seismic across the entire region, we can't close Tain"

We can't close Tain.

In the same interview he states that at that time Serenity was a "potentially very large exploration prospect."

Since then the company has stated Serenity to be an "exploration/appraisal upside." (Jan 2019 presentation slide 5).

Now anyone reading this can take from that what they wish but for me that October 2018 interview is very insightful, not just because of what the directors say, but how they say it. I have invested in a good many companies over the years, some good, some bad, and whether it be believed or not, I know when I am dealing with professionals who are presenting the right balance of confident and assuredness, and these guys are demonstrating that.

So technically we can say this block has never been drilled and so they are drilling an exploration well. The company says differently. They say they have an audited 72% COS drill that is defined as being an appraisal.

It basically comes down to whether one believes that the 2 fields are connected or not. If so then it is 1 field owned by 2 companies with 2 different names for it.

But if it is indeed 1 field, then technically it has been appraised by the 4 wells in Tain, such that the Serenity drill is a further appraisal of that field.

The only thing preventing that from being the case is the belief in what the company and their auditor are saying, particularly after the shock of the L2 pilot well plus, the fact that the OGA have a boundary line, which separates the 2 field zones and thus makes Serenity a new exploration target because it has never been drilled in this particular block.

So the debate can rage on about exploration or appraisal but its really about believing or not believing that the connectivity is there, which I do, for all the reasons above and more.

https://www.youtube.com/watch?v=ut8Ogy-

@Alfacomp With all due respect what matters is how Vanchem gets done and that BMN have sufficient resources to cover it and their other foreseeable plans. So I disagree with your statement.

Given the reduction in the vanadium price it is a very worthy exercise to test that ability, given there are outstanding liabilities on the books.

My opinion, and it is just that, is that BMN will successfully raise debt and they will cover all of their costs but that does not stop me questioning it because to simply expect everything to be alright on the night, in my view leads to complacency.

No disrespect intended to anyone there.

@Knuttie Apologies I worded that wrong and was relating back to the maccas21 post of earlier.

The EV/EBITDA figure cannot in my opinion be derived from employing the total cash on hand and the total earnings.

Nor can the earnings figure of $30.8m be used because it involves the non-controlling interest element.

I do not wish to labour this point but I am concerned that there are shareholders being confused by the belief thatVametco is more profitable than it actually is. That it is a great asset is absolutely clear. That it will highly likely be the key to delivering the goal of 8,400mtV and a fully integrated platform, is also clear to me. But to argue that the valuation right now should be many multiples higher based on a figure that isn't as clear cut as some may think, is not appropriate and it is that, that I was attempting to discuss.

@Knuttie I do partially agree with you but there is no denying that the BEE partner is the owner of a certain level of equity, of which a percentage of the cash profits must be applied, and so must tread carefully when spending their partner's cash.

I will admit it is complicated but that is all the more reason to be cautious when assuming that BMN have that cash available to invest, particularly when their asset is not producing the same levels of cash flows, that generated it in the first place.

What we cvannot do is employ the total cash on hand figure as a means to determine the PE ratio because BMN simply do not own 100% of the asset. But I repeat it is complicated.

Maccas21 Excellent.

Yes I did test that theory and as I said earlier, the pre-tax profit from which the split between parent and non controlling interest is derived, is employed as the basis to subtract further BMN related costs, to arrive at a figure, which is the addition to the cash on hand figure (circa $21m at H1 2019).

So the non controlling interest sum as stated in the comprehensive income statement should stand, as it did for the previous 2 years worth of accounts since BMN took over the asset.

So until demonstrated to me otherwise, the total cash figure is a consolidated cash position and does not reflect the actual profitability for BMN from Vametco, for the periods in question.

That's not to say that the cashflows aren't very healthy indeed very timely. It is more a case that shareholders should be careful to attribute too much significance to the profits/valuation, and instead be thinking what that firepower supports in terms of paid for future expansion and value chain development. Those developments are not currently measured in the valuation and are what will drive the true re-rate here but they need time to come to fruition and for the market to appreciate their worth.

@Knuttie Perhaps I have misunderstood you clearly but the minority interest is Vametco related only. Vanchem is currently being purchased by BMN at 100% ownership and so has nothing to do with the BEE partner at Vametco.

The total amount paid by BMN in relation to the BEE transaction was $1.25m and was to be repaid through future dividends from Vametco. So whilst a helpful figure it isn't that large in terms of the overall figures involved.

That fact is more relevant for what it means to BMN's ability to employ Vametco funds and the relationship that implies, more than anything else.

Whilst it cannot be factually proven there is certainly a precedent here in that BMN provided Jaxson640 with the cash needed to obtain the BEE portion of Vametco, and without that circa $1.25m payment, Jaxson40 wouldn't be enjoying those near $24m in profits gained over that last 18 months or so.

On the other side of the coin, the existence of a like minded BEE partner, which is led by a long term consultant/partner of the company, has allowed BMN the freedom to develop Vametco their way.

So the relationship is there that would at the very least create an understanding and trust between the parties. However, as is always the case in business and certainly in S.A, nothing in life is ever free. So if BMN are able to employ those funds, then I would expect it would come at a price or the promise of a future deal.

The really interesting thing for me will be to find out what exactly the refurbishment programme for Vanchem looks like.

The price tag for the 5 year programme is circa $45m but in reality I am expecting that BMN will do exactly what they did at Vanchem, and that is to tackle the easier lower costs improvements first. So whilst the full cost could be $45m, we may well see a significant boost to the 960mtV production from a far less proportionate cost figure.

It should not be forgotten that the Vanchem plant was only "partially re-started in the third quarter of 2018" (see Vanchem RNS 1st May 2019). So BMN struck at best just 10 months post this but will have been in discussions with the owners some time before this. Therefore, any proposed further improvements perhaps won't have had the time or the inclination to have been instigated. Therefore, there is every chance that there are some fairly straight forward operations that could be applied for limited cost.

Except one would hope that the management team have learnt well from their well documented issues at Vametco, and will only promise what they can actually achieve. But if nothing else they have a lot more experience second time around, and as many will no doubt appreciate, the best experience tends to come from the biggest mistakes.

What's also key here is what the company is stating very clearly about Vanchem ;

"The transaction remains on track to be completed on 31 October 2019. The outstanding conditions precedent, namely, the cession of specific commercial agreements and South African Reserve Bank approval, are expected to be satisfied.

The Company is making good progress with local banks for debt facilities and remains confident of completing the transaction without relying on equity capital markets. Further updates will be provided as appropriate."

So there isn't anything to be afraid of in terms of this or any other future transaction being shareholder dilutive. This is not about that, it is about how much debt does BMN need to raise in order to complete Vanchem, and then what and where can they then push on with, in order to first and foremost expand production, and thus create greater revenues even in a low price environment plus, what can they then go on to do in the energy space.

It is important to also appreciate that FM in the Energy Storage webinar was clear, that the electrolyte plant will be financed by both partners, so IDC also, and that there would be debt elements involved.

At $10m it isn't all that great a task to cover but it is good to know that said plant costs are potentially one less thing to worry about, which when complete next year, will start to add further revenue streams through a completely different market, which when given a little time to demonstrate itself, should give the market great comfort as the risk profile begins to share itself out.

Hello maccas21, good to see your name still popping up on the BB.

I am going to have to challenge your figures a little there because as far as I can see, you have employed a fully consolidated set of earnings, which do not take into account the non controlling interest element of those figures.

As I discussed last week, the H1 accounts has various accounting figures that give insight to the non-controlling interest but it remains difficult to determine exactly how much of the cash total is BMN's and furthermore, how much they would be entitled to spend.

What we do know is that in the Consolidated Statement of Comprehensive Income the post tax profit is stated as being $34.5m, of which $10.2m is booked as non-controlling interest, so 29.6%.

The 2018 Annual Report comprehensive figure for the non-controlling interest is stated as being $14m.

On a very simple basis that equates to $24m.

There are then further costs/gains that are run against the pre-tax profits figure to achieve the $21.5m net increase in cash figure in the Consolidated Statement of Cash Flows. These include costs that should only be directly attributable to BMN, such as the $600k deferred payment to Evraz and the $6.8m down payment for Vanchem. So whilst the net cash figure changed, the portion attributable to the non controlling interest shouldn't have.

So in theory BMN holds circa $42m of the total cash on hand.

Another interesting point that should never be forgotten is the deferred cost for Vametco. This is based on a EBITDA calculation against the Vametco Holdings 31st December 2020 accounts, and is to be paid when those accounts are released. This is not to be confused with the BMN full year accounts, so non of the revenues generated in 2020 from Bushveld Energy or indeed Vanchem are attributable.

BMN are keeping a running total of this payment based on vanadium prices achieved.

To demonstrate this, one can see that in the 2018 accounts (Note 27) it was estimated at circa $17.5m, whilst in the H1 2019 interims it is now down to $11.5m. That are as far as I can see is based on the EBITDA figure for H1 of $42.3m x 2 but don't quote me on that.

I do not see any of the above being a particularly big issue but it is important to be clear on what BMN actually achieve through Vametco and therefore, how much cash they have to meet their ambitious growth plans.

I have taken up more than enough space on this BB today, but would leave you with this ;

Slide 58 of the BMN Energy Storage 1001 webinar lists the 5 advantages of vertical integration.

No.5 says this ;

"Higher valuation multiples, as energy and diversified listed companies carry higher earning multiples than miners (in part due to relatively lower capital requirements)"

Large scale mandates help deliver that vertical integration in its most advanced form.

The Eskom BESS project is the greatest near term chance that BMN have to obtain those large scale mandates.

Deliver that and those vanadium mining profits will begin to receive the sort of valuation that is expected by the community here, and it won't matter if BMN is in South Africa or not.

Have a good weekend everyone.

@Sanchez599 Always and I would trust that my wording is never construed as anything other than tolerant and willing to discuss.