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Having now finally breathed out, I will say this ;

It is no longer about is the opportunity there and can the BMN model exploit it, it is about who now exploits it fully.

Given what BMN has and what it is about to unleash on the market, either BMN will exploit it or someone will buy them out and exploit it for them.

So either a lot of money will be made here or an absolute ridiculous amount of money will be made here. Either way I'm in for the duration.

Slide 58 states under item 4 of 'Advantages from Vertical Integration'

"Reduced volatility of revenues and profitability, as energy storage features lower market volatility than commodity markets"

Once that is fully demonstrated, then that will be like a red rag to a bull for pensions, investment funds, venture capitalists, miners etc etc etc.

Because BMN will be recession proof.

The Eskom question was mine and the answer was exactly what I was expexting and looking for.

Thank you.

Game on.

Slide 59 please. . . ; )

I have tried that it says live event has ended

I am unable to access. What is the best method to do so

Whatever it is, it is certainly my achilles heel.

So all remaining warrants have been disposed of within days of each other, and immediately prior to an energy storage webinar, which comes during an ever diminishing period when BMN have said they will publicize their business model for BE, announce their dividend policy and float on the JSE. And don’t even get me started on brownfield acquisitions.

I know one shouldn’t try to add too many twos together but there are an awful lot of twos flying about don’t you think.

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Beyond that we need to be a little more careful with our assumptions but what BMN is looking for, is good reason to scale up its operations. To do that, just like all other battery developers, it needs front end customers to justify the investment. Thanks to the World Bank, SA and I am sure the SADC, they have that opportunity before them.

Lets remind ourselves. The global installed energy storage market is expected to reach on average 30GWh by 2025. The World Bank has commenced an investment drive specifically focused upon battery storage to create 17GWh of deployments by 2025. Thus 57% of the total expected market has financial backing from a source that is focused more on bringing affordable electricity to deprived people than the cost benefit of deploying said technology.

BMN is focused on the African market and will have direct access to 13 members of the SADC (Southern African Development Community) through a free trade agreement, thus gaining the chance to greatly improve their competitive advantage. However, first and foremost, as a fledgling VRFB developer, they have as their very first target, a whopping 1,440MWh World Bank backed battery storage project right on their doorstep, thus positioning them to deliver the cheapest VRFBs ever seen. However, if that weren’t enough, they have strongly indicated that a leasing model will be released to the market and therefore likely also targeted at the Eskom BESS project.

To top all that off they are offering a new exportable industry that will create 1,000’s of jobs in SA and beneficiate local minerals, all in line with the SA government’s latest and loudest tune.

If they strike a home run at Eskom, then they set themselves and their leasing model up, to attract further greater World Bank investment, plus of course place them and their products in the global shop window.

What can possibly go wrong? Lots. What can possibly go right? Even more.

The VRFB market and the opportunity it offers should not be judged on a global scale. My first interest is not how much vanadium the world will need if VRFBs take 25% of the global market or not. I am not invested in world vanadium market, I am invested in BMN.

What BMN look on the cusp of offering, is an answer to what has been holding VRFBs back for so long. That is what I care about and from where I am sitting it looks very much like they have found not only an answer, but an extremely lucrative one, which will turn the battery storage market on its head. If the rest of the VRFB market goes on to deliver those many thousands of tons of vanadium demand then all the better, because BMN is swimming in the stuff. But first and foremost this is about BMN and that integrated model and whilst the market is watching that stone, I am firmly focused on those ripples.

https://www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2018/

http://www.bushveldminerals.com/wp-content/uploads/2018/05/Bushv

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So in one fowl swoop, the World Bank delivered not only 57% of the stationary storage expected to be deployed by 2025 but also specifically battery storage, in developing and middle-income countries. Thus we haven’t even begun to consider what developed countries will achieve in that same timeframe and it is they that are expected to drive the market.

Therefore, the question will battery storage get built has been firmly answered.

So then it comes down to which battery storage technology will dominate. Lazards latest analysis (see below) highlights 3 main battery technologies, lithium-ion, VRFB, and Zinc Flow. Given where we have come from, the cost differences are now minimal. However, on paper lithium-ion still has a small edge over its 2 competitors.

3 key points.

The analysis is global ;
It can’t possibly include the BMN value chain because it hasn’t been published yet.
It does not include a leasing model for VRFB.

The expectation is that lithium-ion will still take the lions share of installations but it is all based on global market considerations. That is not where investors should be focusing. If we zoom in on BMN, the company who for me, will come to be shown as the most effective and streamlined VRFB producer in the market, then we see factors that will completely up end those Lazard figures.

Lets start in SA, thus far the home of $72m of that World Bank battery funding. Lazard states that the global average price for solar +PV is as follows ;

Lithium - $108 - $140
VRFB - $133 - $222
Zinc - $115 - $167

I repeat it is global. That said at the lowest end of all 3 technologies there is now only $25 separating the 3 with VRFB set as most expensive. That $133 figure for the VRFB does not consider a SA based vanadium miner producing SA based electrolyte for a SA based market, and leasing the vanadium. It simply cannot.

If we return to the vanadium 101 presentation and my previous highlighting of the cost breakdown on slide 26. There we see that the vanadium and delivery & assembly costs are around 43% of the total battery cost. The above description, be it simplistic, of BMNs business model, knowledge that is easily findable, clearly shows that in SA at least, it is highly likely that the BMN led VRFB is going to be a force to be reckoned with, and that’s where Eskom and it’s 2000MW energy storage need lives.

However, that SA based VRFB is going to be assembled in SA, which is part of a energy hungry SADC (Southern African Development Community), 13 of its member countries are currently signed up to a free trade agreement based on ‘local content’, and they are all Sub Saharan African countries whose economies fall well within the World Bank criteria of being‘developing’.

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It is very interesting watching and interacting with the growing vanadium investment market community and commentary.

What is abundantly clear is that the majority of the market is still a long way behind the curve in terms of the vanadium market dynamics, but more importantly BMN and its place within that market.

There are clear signs now that market influencers are finally enabling the market to better understand the true scope of the supply deficit, but it is still only happening in stages. That’s fine, because now it has become about catching up not waking up.

Still, many investors are still acting like the market will suddenly find an answer and if anything the higher prices are beginning make them more cautious. Better still the vast majority of the thinking is still centred on the dynamics of the steel market only.

But whatever the market’s ability to determine the vanadium market from a steel point of view, it is still a million miles away from spotting the true VRFB opportunity, and further still from understanding BMNs place within it all.

It is if you will like a ripple effect where the focus is still on where the stone entered the water.

The market is currently incapable of focusing its mind sufficiently enough to understand the concept of battery storage, let alone VRFBs and let alone BMNs ability to disrupt that space. Yes we see words describing what batteries are essentially capable of doing, but there is very little effort being applied to understanding what that requires, and it is that understanding that in my view enables investors to gain the necessary head start to make the best returns, if they would just take the time to try to appreciate it.

The market is talking about global VRFB efforts and results, and fears about high vanadium prices snuffing out VRFB progress, when it should be analyzing individual company’s ability to disrupt the battery storage market. If it did that then it would already be showing far greater interest in the BMN integrated model.

In the BMN Vanadium 101 webinar last May, the size of the potential market for energy storage was presented, with on average 30GWh of stationary storage deployed by 2025, of which VRFBs are expected to take on average 20%, so 6GWh.

Upon seeing that figure, the thoughts straight away jump to the 32,500 mtv it will take to generate that storage, rather than how and who will it achieve it. Even then it is still for many just a number with no visible path to achievement, particular when there was little public acceptance of battery technology, let alone VRFBs. Jump forward just 5 months and we have the World Bank not only supporting energy storage but directly focusing in on battery storage and backing it to the tune of $5 billion, to produce 17GWh of installations by 2025.

If you aren't all too weary from your journey today, there is a 3 post piece coming your way. . .

@Endion I have BMN attributable full year EBITDA running at circa £67m.

However, I employ the same total operating cost of $31,200 for H2, as reported in the Q2 update.

The key for me though is not how big the EBITDA or profit figures are for 2018, but that they clearly show that the BMN declared 3 year investment figure of $170m, is well on the way to being covered by existing cash flows.

Thus an investment now is protected and able to benefit from substantial growth inboth the mining and energy platforms. The story is 2021-22 not 2018-19, as exciting as it already is.

@pb940 Yes with the Friday's confirmation we now a Q4 average realised price in the region of $109,000 per mtv.

That is after 10 weeks of the 13 week period.

If prices remain at that level for the nexty 3 weeks then Q4 will be circa $112,700 per mtv.

At 750 mtv made and sold, and an all in operating cost of $32,500 per mtv (as per Q2), that would equate to EBITDA of $80,000 per mtv, which is circa $60m on a 100% basis.

Whilst there is still some $15 between European and Chinese prices, at this stage it really doesn't make that much difference. The hard work is done and Q4 is going to be a very significant month even if that 750 mtv figure slips a little.

It now becomes about Q1 2019, which starts in just 3 weeks. It is there that any further rises moving forward will now be felt. If prices start at around $135, then that SP Angel target of $75 is going to be under pressure form the off, and if that figure is under pressure then so is that 87p target.

And we are still only talking about upto 5,000 mtv. With such massive firepower being generated in Q4, the declared move to 10,000 mtv cannot be all that far away from being demonstrated.

As per my post the other day, clear evidence that OPEC+ won’t allow oil prices to recede very far. The policy has worked once so why not employ it again. That doesn’t mean that prices aren’t in for further reductions, more that the confidence should be there that a return to ‘low’ prices is simply not on the cards in 2019.

https://www.zerohedge.com/news/2018-11-11/opec-floats-1-million-barrel-production-cut-after-oil-price-tumbles-bear-market

Ophidian I am out and about today so can’t provide an exact link. However, you will find it in the Admission Document on the BMN website under investors downloads. The information is in the Vametco section of the document p.230.

However, p.243 says 5,073 mtv, which is information received direct from the company so likely the correct figure.

If you are doing what I think you are, then it’s well worth reading the Vametco Document thoroughly as there is info about how the company plans to mine greater quantities of ore during the good times, so that production costs are lower during times of lower prices. An example only.

Personally, i don't see the reduction in the oil price being a long term issue. The waiver by the US has caught a few off guard including it seems Saudia Arabia, hence their move to quickly support the market by announcing their discussions over a further supply cut.

Saudia Arabia have made it quite clear that they are prepared to step in to support their expected price range, which for me sits between $70-80 dollars. Things won't change over night but at present I do not epxect prices to breach $60.

Amerisur have previously been keen to communicated that at $60 oil mark generates net cash backs of over $40, although the CP0-5 production does push them ever so slightly under that figure. From the figures it is clear that what $60 means is actually circa $65 brent

That's still very healthy and for me the least they can expect even in these changing winds of sentiment.

The interims demonstrate that at prices just 8% higher than that, the company is capable of adding significantly to its net cash even whilst conducting extensive exploration.

So they have more than enough protection from any temporary pull back in oil prices. Thus giving them time to express themselves through the drill bit.

Next week signals the end of signposted 4 weeks for the Pintadillo-1 drill to be re-mapped and further drilling decided upon. I trust it will come with an update on the production achieved. I cannot see how there won't be further drilling considering the civil works that were committed to this pad, plus the fact oil has been found. It could even prove to be a very lucrative new find and is therefore well worth waiting for in my view.

Add Indico-1 to that in December and for me any headwinds in the oil price are at the very least, worth monitoring, because sentiment seems to chnage like the wind at the moment.

Its the Q3 Update that just keeps on giving.

I simply love this teasing quote ;

"Our primary focus is to continue expanding our footprint as we execute on our strategy. We are well placed to achieve significant benefits from our high quality assets and further strengthen our competitive position."

Read as Phase 3 is coming, brownfield expansion is coming , BE is coming, Brits near surface cheaper ore is coming, and we have all the cash we need to pay for it all.

Lovely jubbly.

Yes there is clear evidence that phase 2 and 3 were always going to overlap one another (see the you tube phase 2 completion video where by elements of the phase 3 works are stated as being completed).

The likes of Ophidian can likely explain these things better then i. I am more information and logic driven and I have believed for some time that the completion of the Sojitz deal was the catalyst for the company to unleash the Vametco cash flows across the vanadium platform plans.

The message was for me very clear in the 17th Oct interview that FM had with Proactive Investors and it is repeated again today in FM's opening address ;

"The successful completion of the acquisition of Sojitz's interest in Vametco has enabled us to accomplish our objective of achieving maximum ownership of the asset"

The plans that have been communicated previously were always part of the agreement that Sojitz had to buy into. They were designed for the benefit of Vametco and its shareholders. The removal of Sojitz from that picture means that its just BMN and Jaxson 640 their like minded self appointed BEE partner.

Therefore, all plans and cashflows can and in my view now are being driven in the direction that best suits BMN's goals.

A fast tracking of phase 3 is for me necessary if the company is going to have sufficient feed material for an electrolyte plant that we are told will be completed in 2019. With the ramp up issues experienced with phase 2, can the company really risk sacrificing steel customer directed product (which is what the 3,750 mtv will be when it has had chance to be pushed out into the market in H1 next year).

At 200MWh the electrolyte plant needs circa 1,100 mtv to operate at full production. The uplift in phase 3 os 1,250 mtv minus minor nameplate efficiency losses of course. Coincidence? perhaps. But both were always scheduled for 2019 and are perhaps the reason why the electrolyte plant is starting at 200MWh and not 400MWh.

All just my musings but phase 3 does fit very well with the electrolyte plant and like I say, with no corporate barriers they can really push their expansion, which is why the Sojitz buyout was so much more than 16% more of Vametco.

I do think that contributors here are looking at these broker targets all wrong. It doesn't really matter whether their interpretation of vanadium prices is accurate or not. What they are doing is providing investors with a base line from which to develop their own investment case and research.

For example, for 2019 SP Angel state that at $75 per kg and 3,750 mtv sold, BMN will personally achieve $121m in "healthy cash flows." just from Vametco.

At the current exchange rate that equates to £93m.

More importantly they say that those very same figures will achieve $122.9m post tax profit for Vametco on a 100% basis.

That means circa £70m in profits for BMN and their shareholders. Imagine the firepower that gives BMN and their future plans.

Many may believe that the vanadium price will be much higher but does it really matter at thisn stage. All that does is add to an already very strong investment case further by providing a sizeable safety net (remember the current price is $122.50) per kg).

What these brokers also do is clearly state what they haven't or cannot currently value. Thus we are given an additional angle from which to determine the true potential value, with the base case when tested of course, acting as the point from which we can spring from.

SP Angel are and have always said "We have yet to add value for Bushveld Energy which is 84% owned by the group and is working to deploy vanadium redox flow batteries in grid as well as industrial applications in South Africa."

But it's coming just like that further brownfield expansion, but the likes of SP Angel must wait for the detail before they can value it.We don't need to do that.

£70m profit for 2019 plus BE entering the ring plus knowing the cash will be there for brownfield and whatever plans they have up their sleeves, is more than enough for me, and given the saftey margin involved I feel really good about achieving it.

The Indico RNS from 31st Oct is clear when it says ;

"A further announcement will be made on completion of drilling operations."

There will be further RNS on Indico-1 until then.