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Indeed Richken. It is also important to remember that this is all happening to a backdrop of 'sustainable' dividends being on the cards.

The fact that BMN can today announce a $170m investment in the next 3 years but know it can still afford to give cash back to its investors, demonstrates the strength of the business but also the growth that can be expected in the valuation.

What it also says is that FM didn't need to be at that conference today, he doesn't need investment, but I am sure he would welcome the right investment if it added value to the business.

So one would have to place that in the context of the event in question. This was Ramaphosa's baby, and he wants to show the world that SA is open for business and is investing. So I just wonder whether FM was invited along because through the IDC it is clear that this is a fien example of SA getting things right. That says much about the awareness Ramaphosa has of the BMN story and what BMN needs to succeed.

That in itself is quite staggering because BMN the so called little AIM vanadium play, can attend an event so big as that conference, stand on the very same stage as Ramaphosa, and do it at the bequest of the SA government, not because they need to be there and or need the money.

What does that say for the growth that is to come here.

@Ophidian I could not have put it better myself, thank you.

I have the very same clarity about all of this that i had during the days of the Vametco hunt, except this time around it is a whole lot easier to see and understand.

Africa's biggest utility just announced a 800MWh 'pilot project' for electrochemical battery storage and the market is unable to put two and two together.

The market is busy talking and comparing BMN the vanadium producer, this BB is talking about BMN the fully integrated vanadium producer, and Eskom just handed them the keys to the city.

It will be fun watching the market get it's head around what that truly means.

@Alfacomp In my opinion we are experiecing the very same market position and understanding that we had immediately prior to the Vametco acquisition.

The level of detailed knowledge driven by the desire to find out has once again placed this BB in the position of being considerably ahead of the pack. The only difference this time around is that the vast majority here have already made the most of this situation, and so it becomes more about the sport of being able to watch and wait until the world catches up. A task some still find hard to do I might add.

The world of vanadium is busy talking about and comparing itself to the likes of BMN, resource, grades etc. They are busy focusing on the price of vanadium and what it perhaps will deliver them if their chosen vanadium play makes it into production. They reference energy storage but a great many have little or no idea what it actually means and how it will dwarf vanadium as a future market.

But BMN have already moved on from vanadium as purely a mining play. That story, that play, was delivered 2 years ago. It will of course keep on delivering as BMN expands, but the story, the focus, has moved on.

Whilst the vanadium world pats itself on the back for being a part of the gold rush, BMN has already laid the foundations for the next even bigger gold rush, grid scale battery storage, and the market is just not seeing it, but that's not important, so long as we see it and take advantage of it.

It's all very well being a potential vanadium play, enjoying the rise from these record prices, but the real business is being vertically integrated, a move very few vanadium plays have even recognised, let alone made moves towards.

Take Largo as a very good example. It has a £1.3 billion MC and it is solely reliant on the vanadium market as a mining play. It has no future proofing whatsoever and if the vanadium market retreats so does it's value.

Right now BMN is once again at least 2-3 years ahead of a market that is still trying to understand itself properly. When vanadium prices eventually begin to tail off, many will begin to perish.

But BMN don't have that problem, they can balanace that risk with exposure to VRFBs as they are taken up by the energy market, they can enjoy profits at all levels of the value chain, they can expand at will to supply their very own VRFB business, be it good times or bad.

From what I have seen this week in South Africa, that take up is closer now than it has ever been, and BMN has positioned itself to take full advantage of it whilst investment advisors sit around still wondering what all the fuss is about.

Large scale mandates for battery storage are here, they are no longer a dream, and BMN will take full advantage of it. All we need do is sit back and wait and watch BMN dominate a market the world is yet to even grasp.

Continuing the thread and theme of my 'monster 6 post' piece on the Eskom BESS Project, here is a very interesting article on the message delivered by Thava Govender and Thabang Audat (who incidentally was giving the address that Minister of Energy Jeff radebe was supposed to give).

Take a look at this for a powerful message ;

"The uptake of large-scale battery-based energy storage will accelerate the implementation of renewable energy technologies and drive the decentralisation of South Africa’s energy system. Furthermore, energy storage, small-scale embedded generation and smart-grid solutions are set to fundamentally transform the country’s electricity landscape."

That is the key note message from the chief director of energy planning in the Department of Energy, and Eskom’s outgoing group executive for generation, risk and sustainability.

Could Bushveld Energy have asked for a better statement from such key sources, I mean really!

green light firmly on BE, so drive on.

http://www.ee.co.za/article/battery-based-energy-storage-to-accelerate-renewable-energy-take-up.html#.W9LxuYFXeEc

I have just listened to President Ramaphosa's opening address and in doing so, I cannot help but feel a renewed confidence in SA's ability to support and drive willing business forward.

President Ramaphosa says " where potential investors have had to wait for years at times, we are working to reduce those timelines, to make it a lot easier for investment sot be affected with greater speed"

With political and regulatory stability in SA, BMN has one of the final pieces of the puzzle it requires to truly realise it's full potential.

As investors in this company, we are now sitting on an absolute gold mine of opportunity. The scale and size of the value proposition here is absolutely staggering and the options seemingly endless.

It would be exciting enough to just be invested in an expanding vanadium mining business, growing into clear and expansive supply shortages in the vanadium industry.

But what we have is the THE vanadium miner, with the very highest grades of V, with the largest resources in the world, but which at the very same time has access to low cost brownfield expansion.

So not only has BMN the right mineral at the right time, it is located in a place where it can take the greatest and most expedient.

But now we have a very clear and present opprtunity in SA energy storage and the golden carrot that is the Eskom BESS project. Phase 1 is eye opening enough at 200MW, but the size of the opportunity that will open up, would be great enough to sustain Bushveld Energy alone, nevermind the message it would send out globally about what Bushveld Energy and it's partners are capable of.

Both those arms of this business are worthwhile investments in their own right, but combine the two and the opportunity becomes something almost unfathomable, unimaginable.

If i am investing in mining, then i am investing in BMN, because there is no other opportunity out there that can possibly match that story.

@Ophidian I am more than happy to agree to disagree because quite frankly both options are beyond those wild dreams we shared just 2.5 years ago.

The presenter at he SA Investment Conference has just told the delegates gathered, that all companies that are presenting today be it in the conference hall or the breakaway sessions, have all undergone

"due diligence, rigorous checks and balances, so these are not pledges, these are bankable funds"

BMN have had to prove that the $170m will be spent, that it is real.

So when they say $170m in the next 3 years, they must have a very very very good idea where and on what they will be spending their money.

Brownfield acquisition anyone? 7,000 mtv plus expansion for less than Vametco 2019 cashflows anyone?

28.5p to buy anyone?

@Sanchez599 I would take that further and say that this year has been a game changer for the company, but you do right to especially focus on this week.

Wonderful to see the BMN story being told to such an influential gathering and President Ramaphosa himself.

@Ophidian I am in no way writing off Mokopone but this event is all about Ramaphosa demonstrating the level of investment coming and being sort by SA so he can reach his self declared R1.2 trillion investment drive.

So my gut tells me that if there was further investment to be had in the next 3 years, then FM would have included it.

And why not, because it is the sensible thing to do, to support the president's goal.

So when FM says R2.5 billion to take production to 10,000 mtv inside 3 years, then that means either Mokopone is being watered down to serve brownfield, or as the information from BMN has been very clear, it is not involved in the next phase of expansion, because the company has been already very clear that Brits will help drive the expansion to 10,000 plus mtv.

It's only a viewpoint but with a mining right and DFS still to come from Mokopone, it makes sense that it isn't included in the 3 year fiancial plan. That's not to say of course that it won't make up year 4 and 5, because if VRFBs truly take off, then as Daisan has correctly pointed out, the demand will be there.

Short and sweet and effective. Told the conference they are looking "we envisage spending upto ZAR 2.5 billion in the next 3 years". That's circa $170m.

Total spend for the next 3 years, to achieve brownfield expansion, existing asset expansio and VRFB assembly. If Mokopone was going ahead in it's current form, that figure would be much higher.

"making sure that every vanadium unit we produce, we beneficiate it to the greatest extent"

Ramaphosa has gone on record many times before to say that the beneficiation of SA minerals is a key driver of the mining industry moving forward.

And to finish it all off, he has a few kind words of thank you from the president.

When we were languishing at £8m MC and 1.3p to buy, who would have thought that just 2.5 years later, little old Bushveld Minerals would be asked to present at the president's SA Investment Conference, with President Ramaphosa looking on.

The boy has become a man.

Better still Ramaphosa is actually sitting on stage!!

FM will be live on stage at the InvestmentConference shortly. He has 1 minute to sell the company's story. No pressure then.

There is a list of CEOs so when he exactly speaks is not clear, but speak he will.

Oh and Ramaphosa is in the audience.

https://www.youtube.com/watch?v=CY3a6DerwpI

Enjoy.

Thank you Sanchez599.

Whilst I would not wish to push my luck, it is very interesting to see that the article says ;

"The projects will, among other things, cover. . .clean energy, mineral beneficiation "

R150 billion is over $10 billion in investment. That's not to be sniffed at, even if it doesn't directly involve BMN.

Let's see shall we.

https://city-press.news24.com/Business/trudi-makhaya-r150bn-is-on-the-way-20181015

Hello Ophidian,

Yes I believe our last posts crossed one another and indeed dealt with that very brownfield issue. It is for me as I am sure it has always been for you, a given. I am just conscious that it doesn't appear on the 2018 Strategic Objectives on page 18 of the Annual Report, but more importantly with the JSE listing and the unveiling of BE, it is starting to feel like te end of the year may be just too packed.

Thus my view that brownfield will likely come in Q1 2019 with uplift in production timed for post vametco phase 3, so early-mid 2020.

As for the coal, it is a solid and worthwhile project that could add much significant value, but unfortunately it can never realise it in what is rapidly becoming a green technology orientated business. So yes, it's an absolute given that it is going, be it a spin off or sale. I agree the same deadlines that the Eskom contracts now bring to the vanadium business, can just as easily be applied to the Lemur project. The sooner it goes the better.

@Zeusfarla without wishing to blow too much smoke up the rear end of BMN and their BOD, because they aren't perfect, it is important to remember that they are always far further ahead than we can ever possibly contemplate.

Personally, I believe the Eskom contracts bring a focus to everything by introducing a deadline sorts and more importantly a clear goal.

BMN tweeted just the other day in answer to the Bloomberg article questioning battery uptake due to high prices ;

"There is enough high-grade #vanadium on the #Bushveld complex long-term interest to support both the steel & battery industries. There is also enough scalable, low cost brownfield production capacity. Now for innovation and the necessary boldness!"

BMN aren't serial tweeters, what they are is very good chess players.

2019 will deliver those Eskom contracts, it will deliver electrolyte production and it will deliver 5,000 mtv at Vametco. But in order to support what will likely be a continuous roll out of projects by Eskom, plus other demand too, both the electrolyte plant and the mining arm, are going to need to demonstrate that they can continue expanding.

So if BE are successful with Eskom, we can expect a fairly rapid upgrading of the electrolyte plant to 400MWh and prior to that, another brownfield acquisition, which I expect no later than Q1 2019.

It is also important to remember that the company expects to list on JSE this year, which I cannot help but feel will be timed with something significant, be it the BE business case, the brownfield expansion, or something else we aren't yet seeing.

In reality BMN shouldn't need to raise cash because Vametco is doing so well, but perhaps we aren't thinking big enough regardng their true plans moving forward.

I don't believe that IIs investing in BMN is where investors here should be focusing their energy. The key to BMN has always been the fundamentals and the business's ability to exploit them.

If they simply keep on doing what they have thus far done exepctionally well, then the money will follow, whatever the perceptions about SA.

What will assist that significanrtly will be the commencement of dividends and the JSE listing. JSE investors are essentially South African, so they live and breath the politics everyday. Couple that attitude with a stable dividend and the yield itself will start to right some of the wrongs in the valuation.

But even without all of that, this company is about to demonstrate what a truly vertically integrated vanadium miner and VRFB developer looks like. When it does it will be the very first to achieve such a feat.

It will be doing it at a time of near record vanadium prices that are demonstrating themselves to have medium temr longevity.

It will be doing it at a time when renowned world organisations are demonstrating an understanding for what battery storage can do for the climate, what it can do to support renewables, what it can do to help give poor off grid communities, a better standard of living. That is leading to them making unprecedented amounts of money available for this technology.

The World bank alone is driving upto $5 billion in investment and we are only just starting to get going.

When BMN is able to demonstrate how it can make money from the energy storage market, and then couple that with the outrageous money it is and will make from the mining arm, then investors, be they IIs or private or whatever, are going to want to buy this stock.

I repeat again. BMN will be the very first fully integrated vanadium miner and VRFB developer, with access to the profits along the entire value chain, at a time when energy storage, clean technology, are the buzz words of this century.

Investors sit here on a daily basis interrogating why the SP isn't higher, which is their prerogative, but it pure folly, because that package, in these times, backed by such abundant and easily accessible resources, is going to be worth many times the current SP, with or without IIs involved. So long as it doesn''t get bought out by a predator, which in reality is the true barrier to the greatest PI riches here.

(2 of 2)

In that same 2017 Annual Report BMN states again on page 27 what the BE business model is ;

“Bushveld Energy’s business model envisages activities along the VRFB value chain and will include electrolyte manufacturing, VRFB assembly and eventual manufacturing as well as energy storage project development. The company will leverage its low-cost scalable production base to build capabilities along the VRFB value chain. Partnerships are an important part of the business model”

It says ‘eventual’ (VRFB) manufacturing, it doesn’t say eventual VRFB assembly, and VRFB assembly would secure BE’s position for this first phase of contracts, a set of contracts that for the winner, will bring a great deal of competitive advantage moving forward onto later larger schemes. So could it be that the electrolyte facility will infact include VRFB assembly too next year?

For the record I do not expect everything to run smoothly so ‘end of 2019’ could be a little keen plus BE and their partners won’t be expected to deliver all 800MWh in one go. So the ‘end of 2019’ is most likely the front end projects, meaning much of the roll out would be in 2020, which plays very nicely into BMN’s hands.

But there still appears to be something missing. I don’t believe that Eskom is the only thing BE has going on. There is clear evidence in the BE wording that other deals are out there.

The Annual Report page 27 refers to ;

“delivering its initial projects” not project.

“Securing additional strategic relationships with downstream stakeholders in the global vanadium battery supply chain and electrical power developers and producers operating in Africa”

BE is not going to have that with Eskom before the end of the year and yet just a few days ago, the CEO stated that all systems are go to communicate the BE model this year. So what is going to truly drive that announcement?

We will find out soon enough I am sure.

(1 of 2)

Given what I have discovered about the Eskom BESS Project and the position of strength that Bushveld Energy finds themselves in, my thoughts now turn to what this means for BMN plans.

To be clear I am absolutely certain that the pending November update from Bushveld Energy will be long awaited launch of the company. Why else delay the update by upwards of a month.

As BMN stated on page 27 of the 2017 Annual Report

“the company expects in the second half of 2018 to be in a position to outline its business model, cash flow capabilities and valuation in Bushveld Minerals.” That still stands because FM stated as much in his interview with ProactiveInvestors on 17th Oct 2018. By that point he knew when the Eskom BESS project announcement was coming and what it meant in terms of timelines, and yet he still said it.

So my focus is on the tender release date itself and what BE will have to do before they can take part in it. I believe the financial relationship between UET, the IDC and BE must be publicly known prior to Eskom allowing this potential JV to take part in the tender. I believe there also needs to be clarity on what BE can and will achieve in order to be in the very best position to win those Eskom contracts. But far more importantly, with a clear desire to go and win those now known Eskom contracts, BMN can no longer hold off on telling its shareholders what this business will look like and how it will move forward.

The first phase of 800MWh is due to be awarded by Q2 2019 with “construction, testing and commissioning anticipated before the end of 2019.”

BE in the Q2 update stated that “The project remains on track to produce electrolyte in 2019 for South African and international markets.” Now that Eskom contracts are available, the “South African. . .markets” element of that statement becomes much clearer doesn’t it now.

But the question will be can they guarantee enough ‘local content’ to ensure that their gain sufficient competitive advantage over the competing companies, will they even need it at such a stage.

The plans included in the EIA documentation for the electrolyte plant, are marked up as VRFB assembly plant. The EIA is designed to answer the electrolyte question, it is not required for the assembly element of the process, so one would not expect to read much about that particular part of the process at that stage.

Personally I am not expecting too much from the Q3 production numbers, if anything I am looking for is a return to stable production. Given the events communicated in the interims and the further disruption with the strike, for me, any impact will be driven by the forward guidance.

In the interims the company stated ;

“The unprotected industrial action may impact Vametco's 2018 production and cost guidance. The Company is in the process of quantifying the impact of the stoppage and such guidance will be provided no later than the Q3 2018 Bushveld Vanadium Operational update.”

In the Q2 Update the company said this ;

“Vametco production guidance for the year has been revised downwards to between 2,850 and 3,000 mtv. The upper range would represent a 13% increase in production over 2017.”

“the Company expects to see production rates increasing towards the annualised production rate of 3,750mtV in the coming months.”

For me the strike definitely had an impact on Q3 production. I believe efforts will have been made to limit this by drawing upon the workforce’s incentive based willingness to make amends and by offsetting any losses with inventory sales.

My view is that we can likely expect production close to that seen in Q2, so circa 630 mtv, and if they make that then I will be very satisfied, given the problems experienced. If they can then boost this to over 700 mtv sold, then it will still signal a very strong quarter

The key though is the above quote regarding quantifying the impact by “no later than Q3 2018” If the company is going to do that then essentially that means that Q4 guidance will, by default, be available at that time also. Thus investors will have a very good early view point on how the year will start to play out financially. That will also demonstrate how successful the ramp up to 3,750 mtv has been and for me, will be where investors will truly focus their attention.

I have the BMN (4 weeks sales lag) for Q3 at around $78.50 per kg. That would be a 13% increase on Q2’s $69.40 per kg, so again more improvement all round.

But more importantly, Q4 is currently running at a whopping $104 per kg average (week 7 of 13), knowledge which if coupled with a pending known serious ramp up in production (I am expecting minimum 850 mtv in Q4), will give the market something very serious to think about.

(6 of 6)

Through their long standing partnership with The IDC, Bushveld Energy has known from the very start what it has to do to ensure that Eskom battery contracts, when they come, will be won by them. Together with UET and The IDC, they have been busy preparing and lobbying for this day to come. No other battery manufacturer or miner has been doing that because they simply could no foresee that Eskom would announce one of the largest combined battery storage projects in the world. A development that Eskom notes as being merely a pre-cursor for the main event, when it says in it’s ESMF for the project ;

“Should the technology prove successful, there is a potential of scaling up similar technology to allow increased capacity in energy storage from future wind and solar powered projects.”

“Electricity storage can also be used to help integrate more renewable energy into the electricity grid. Electricity storage can also help generation facilities operate at optimal levels, and reduce use of less efficient generating units that would otherwise run only at peak times”

But BMN through Bushveld Energy certainly did and they are ready for what will be a far greater opportunity than ‘just’ 800MWh of batteries.

We will find out soon enough whether their preparations were indeed good enough, but from what I have read and understood, it will not be about if, but simply how many MWhs Bushveld Energy wins in this 1st phase. What that achievement will mean for BMN as a business, what it will open up in terms of opportunities for both the mining arm but more importantly in Southern Africa and world wide, is simply staggering.

The Eskom project opens the door to significant global VRFB recognition and take up, and with it considerable vanadium production expansion. Thus it is the key to Aladdin’s cave.

Bushveld Energy, the IDC, Eskom, the USTDA, and the government of SA, all know it, so what are the chances really that they will let this opportunity slip by awarding the contracts to someone else.

Answers on a postcard please.