Member Info for BigBiteNow

I am re-posting the engineering news article from October 2017.

I would encourage all visitors here to read it and appreciate it in the context of where things stand, some 12 months later.

I would also re-iterate what I stated in my posts of earlier, that The IDC is the lynchpin in all of this, such that Bertie Styrrdom's comments regarding the required changes to the regulatory processes carry far more weight than that of a fund that is simply backing BE.

Remembr what the USTDA report said, The IDC leads the steering committee, which is ;

"working closely with the South African Department of Energy (SADOE), Eskom (South Africa’s national electricity utility), the National Energy Regulator of South Africa (NERSA), as well as other key stakeholders."

I have waxed lyrical before about the key moves made by Cyril ramaphosa since he came to power. The introduction of Jeff Radebe as Energy Minister has provided The IDC someone who wants to see SA succeed, who wants the right solutions to enable Eskom to do better. That is clearly demonstrated through the changes to the IRP, which removed the nuclear option and gave energy storage it's chance.

Through the changing of the guard at Eskom, The IDC now has a willing partner that will think more about how it's business model moves forward and less about how much money it's BOD can extrapolate from the business.

It makes for a very interesting read with all the key players involved with BE and Eskom having their say.

The underlying message is in my opinion very clear, energy storage iscoming to SA and Bushveld Energy will be written on the side of them.

“Energy storage will grow in South Africa, says Langley, highlighting that its adoption will be slow. But, once energy storage takes off and we are using it in the correct applications, it will all make sense,”

http://www.engineeringnews.co.za/article/south-africa-gauging-energy-storage-growth-opportunities-yet-greater-understanding-required-2017-10-13/rep_id:4136

@Cindercone I don't personally see that as a problem.

Firstly, Eskom is still able to raise debt and if anything is improving it's standing in the investment community through it's actions. That doesn't mean that it is by any means perfect, but it has defintely avoided dropping off the cliff.

Secondly, the introduction of energy storage can enable far greater cost savings for Eskom through the removal of the need to build and/or run expensive peak shaving plants. That's not to say that that is how things will start off, but more an example of how eskom can very easily sell the investment in this technology to its lenders.

It should however not be assumed that Eskom will need to pay for any of this themslves.

There is hard evidence of western governments directly investing into SA battery projects. In August this year the UK government committed £56m investment into "a SA battery storage project." That in itself is part of a £384m Clean Technology Fund, which is part of "a joint project from the World Bank, African Development Bank and South African Government.

Given what I have just posted, where would one think that money is heading. Such an investment would be more than enough to ignite the front end BE touchpaper. Infact it's arguably too big at this time.

MN in the 9th October BRR Media interview also refers to the World Bank initiative to raise upto $5 billion to
"deliver 17GWH of energy storage, specifically batteries" "for low income and middle income countries, just like South Africa and Sub Saharan Africa, which are markets closest to us and that we always said we were going to focus on"

Nobody can directly pin the World bank investment on Eskom at this time, but Eskom is a willing exporter of electricity into sub saharan Africa and with the SADC free trade agreement, plus the fact they are the biggest utility in Africa, there doesn't need to be too muchj imagination employed to see where things could end up.

So for me there is ample evidence just from those recent sources to persuade me that money won't be an issue, and with the added emphasis on global warming, those funds are only going to get bigger as time goes on.

(4 of 4)

Having digested all of this, it is extremely difficult to see past a locally beneficiated vanadium redox battery as the chosen battery technology source for both Eskom and the local municipals that it feeds, whatever the temporary issues with it’s electrolyte.

The IDC partnered with BE before the USTDA had even completed it’s study.

The IDC leads the SA energy steering committee of which every man and his dog including Eskom and City Power of the City of Joburg, are members. There is also a clear collaboration being demonstrated between The IDC, Eskom and the municipals, with all other key SA stakeholders along for the ride.

The IDC are working with BE to establish both electrolyte production and VRFB assembly in SA, a process that is already past the point of no return.

When the study was completed it stated very clearly that only vanadium redox batteries can deliver locally beneficiated minerals.

The IDC is very clear that local beneficiation is a key driver to their support of the SA energy industry.

Jump forward 12 months and the USTDA is handing out a grant to BE for it’s pilot battery at Eskom, a very clear message of intent and conclusion.

Page 2 of the USTDA Report is very clear ;

“The U.S. Trade and Development Agency helps companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies. USTDA links U.S. businesses to export opportunities by funding project planning activities, pilot projects, and reverse trade missions while creating sustainable infrastructure and economic growth in partner countries”

I would suggest the USTDA knows exactly where this is all heading.

City Power with The IDC and Eskom have been spear heading the message that energy storage has multiple benefits ever since the report was released in August 2017, they just need the technology and the regulatory authority. The regulatory authority is now there.

BE is clear in it’s message. It expects to achieve large scale energy storage mandates and is so confident, it is already buying the land that will house the electrolyte production that will feed it. Given the evidence above, I do not blame them.

Every message points to a desire in SA to support and drive a vanadium redox battery industry through contract awards at Utility and Municipal level. Yes SA is going through the motions of providing a level playing field, but everything they are doing is pushing in the direction of VRFBs. No wonder BMN are so confident because it looks very much like it has been a done deal for a very long time.

Finishing proving the technology and its all systems go.

(3 of 4)

The article goes on to state that ;

“State-owned power utility Eskom senior consultant Peter Langley agrees noting that the study highlights ample opportunities for energy storage by power utilities and municipalities.”

“Energy storage can fulfil several functions, enthuses City Power demand-side management and supply-side management manager Paul Vermeulen, who emphasises that, for local municipal electricity distributors such as Johannesburg’s City Power, energy storage can be a flexible, distributed grid- management tool.”

“Further, City Power could use utility-scale energy storage for tariff arbitrage, which Vermeulen considers as “probably one of the most realisable benefits” of a storage system for a municipality. Arbitrage means that the electricity distributor can, for example, buy cheaper, offpeak electricity to charge energy storage batteries and then release the stored energy during peak times, resulting in cost reductions through peak power shifting.”

But in order to do this the regulatory framework needed to be updated.

Bertie Styrdom goes on to say ;

“if the provision for energy storage is not stipulated in the IRP, Ministerial dispensation is required for the awarding of generation licences by Nersa”

“Energy storage has been listed in the draft IRP2010–2030, but only in terms of specific technologies, such as lithium-ion and compressed air.”

Remember that article was released in Oct 2017.

http://www.engineeringnews.co.za/article/south-africa-gauging-energy-storage-growth-opportunities-yet-greater-understanding-required-2017-10-13/rep_id:4136

Jump forward to the BRR Media interview of 9th Oct 2018, when MN discussed the revised IRP, which “now allows for storage to be part of that same service that gas would usually provide, which is peaking support”

Remember what Mr Vermuelen said about that “peak power shifting” being used as “tariff arbitrage” which is “probably one of the most realisable benefits” of energy storage.

Did a green light just turn on somewhere?

The engineering news article is full of illuminating quotes but Mr Vermeulen also says ;

“Most of the energy storage value – if we are to realise it – will be reaped within the municipal distribution systems, as the majority of the country’s ageing and stressed distribution assets fall in the municipal sphere.”

But Bertie Styrdom of The IDC really brings home the bacon though when he says ;

“The “most significant mileage” for the IDC, however, is in the backward integration of storage technologies into South Africa’s significant mineral value chain”

That quote is post USTDA results. So whatever the benefits, if it’s not SA sourced, it’s not got much of a chance.

(2 of 4)

The following presentation was instigated to demonstrate the key findings of the USTDA, some of which may well be out of date, as the industry and it's objectives have developed rapidly since then. However, two key points highlighted on slide 37 have not changed ;

There are only 4 types of battery technology highlighted on that list as having any sort of "Future Potential for SA Utility Scale Storage"

1. Advanced Lead Acid
2. Lithium-ion
3. Sodium Sulfur
4. Vanadium Redox Flow

Of these only Lithium and Vanadium are deemed able to have 'Significant' potential and of those two only Vanadium is marked as being a "South African Resource".

In addition, from the above list, only Lithium and Vanadium are currently being tested by Eskom.

https://www.idc.co.za/images/2017/eskom/Energy%20Storage%20presentation%20-%20USTDA%20Study.pdf

So as far back as March 2017 the USTDA ( who incidentally just awarded BE a $500,000 grant to develop their Eskom pilot battery) was telling the SA Energy Steering Committee led by The IDC, that the only utility scale storage battery technology that can be mined locally is the vanadium redox flow battery.

Further importance for me lies with the presenters of that presentation.

Bertie Styrdom (IDC Senior Project Development Manager)
Sumaya Nassiep (Acting General Manager – Eskom Research, Testing and Development)
Paul Vermeulen (Manager DSM and SSM) - City of Joburg.

In June 2017, so 2 months before the USTDA report was released officially, Eskom announced the opening of a testing facility for as much as 2,000MW of energy storage on its networks, based at Eskom’s existing Research and Innovation Centre.

In the following associated article dated 13th Oct, Bertie Styrdom says ;

“energy storage could unlock local opportunities in mining and beneficiation, research and development, commercial exploitation and industry development, as well as opportunities in the global market.”

Not if the battery of choice is a lithium one it will not. The IDC incidentally have no known current co-operation agreement with any other battery manufacturers, despite lithium’s challenge.

(1 of 4)

I have been looking at the historical developments that have guided Bushveld Energy and their associated stakeholders to this point in time.

On 13th June 2016 BE announced its co-operation agreement with The IDC of SA.

Christo Fourie, Head of the New Industries Strategic Business Unit for The IDC said at the time ;

"The signing of the Agreement with Bushveld Energy marks an important milestone for the IDC's initiative towards the development of a sustainable Energy Storage Industry for South Africa"

Here is the 'South Africa Energy Storage Technology and Market Assessment' released by the 'US TRADE AND DEVELOPMENT AGENCY' in Aug 2017.

https://www.idc.co.za/images/2017/eskom/USTDA_Public%20Version.pdf

"The objective of the South Africa Energy Storage Technology and Market Assessment was to provide advisory services to the IDC and Steering Committee that will help guide and promote the adoption of energy storage technologies in South Africa."

The Steering Committee is led by The IDC and includes the following organisations ;

the South African Photovoltaic Industry Association (SAPVIA),
the South African Wind Energy Association (SAWEA),
the South African National Energy Development Institute (SANEDI),
Council for Scientific and Industrial Research (CSIR),
Eskom Research, Independent Power Producer (IPP) Office,
Energy Intensive Users Group (EIUG),
South Africa Department of Science and Technology (DSI),
South Africa Department of Trade and Industry (dti) –

The steering committee is also "working closely with the South African Department of Energy (SADOE), Eskom (South Africa’s national electricity utility), the National Energy Regulator of South Africa (NERSA), as well as other key stakeholders."

What that above list demonstrates is that the drive to create an "Energy Storage Industry in SA" is backed or associated with by a powerhouse of key SA stakeholders but led by The IDC.

It is therefore most interesting that BE were able to sign an agreement with The IDC for exactly the same purpose some 14 months before this report was released. A feat no other battery technology developer has managed to achieve since.

It also brings far more weight to that co-operation agreement and the fact The IDC are not only still around but central to what BE is planning to achieve.

Yes I picked up another 30,000 at that exact price. As has been the pattern for the last few weeks, buying is heavily outweighing the sells and yet the majority of the time the buying price drops throughout the day.

There is a very heavy weight around the SP's neck right now, but when it's gone then. . .

@Juxtapose A sensationally good point which I completely forgot about, which is schoolboy. Thank you.

Back to the drawing board on that one then.

There are more tweets appearing on the AMER feed, with clealr indications that at least 2 CPO5 drills are being prepared.

Looks veyr much like the spudding of Indico-1 will be with us soon.

Could it be that the Chiritza Pumping Station is the key here. It is due to complete it's commissioning in 'early October.' It was instigated in order to guarantee additional minimum capacity through the RODA system. The company reported in the 2017 Annual Report that OBA throughout was ;

"constrained in the first half of the year due to equipment maintenance activities in the RODA system and competing volumes in the northern part of Ecuador, which we do not envisage to impact throughput going forward"

In H1 2017 average production was 4,475 bopd against OBA export of 3,936 bopd. 12% less

2017 as a whole achieved 4,857 bopd against OBA export of 4,400 bopd. 9.5% less. So where was the true improvement in the second half of the year.

Better still H1 2018 figures read as follows ;

Average production 5,959 bopd, OBA Export 4,957 bopd. 16.8% less

Yet there is no mention by the company of disruptions outside of their control, as stated in the 2017 Report and the export figure is conveniently close to the minimum contracted capacity of 5,000 bopd.

What the CEO actually states in the 2018 Interims is ;

"OBA throughput levels were impacted during the latter part of the period by the reduced production levels from the Platanillo field"

Whilst perhaps partially true, the reality is average OBA export has not breached 5,000 bopd since March 2018, despite having the ability to do so, and it has been steadily declining throughout that period hitting as low as 3,900 bopd in July, when average production was 4,868 bopd.

From those same 2018 Interims ;

"The OBA has reduced average transport costs since inception from $14.1 per barrel to $3.5 per barrel"

"Following completion of the Chiritza station we will be in a position to increase the throughput of this low-cost route to commercialisation with highly competitive economics."

Either AMER have failed to efficiently export their oil production or Petroamazonas has severely curtailed their ability to do so. Even just using the H1 2018 figures, the company has potentially stored up to 180,000 barrels, just like they did in H1 2017 for the same reason. See RNS from 5th July 2017 when they stated “ excess production is currently in storage in field”

With Pintadillo-1 offering minimum 600 bopd, plus further wells to come, plus Platanillo 22 being brought ‘slowly’ back up to speed, RODA isn’t displaying the capacity to handle it, until now of course.

The Pintadillo-1 drill rather conveniently came in on 25th Sept, just short of the pumping station timeline. So it may be that the company has slowed its Platanillo drilling until the pumping station was completed simply because it cannot even export what it is already producing. If so, with 9,000 bopd now on offer, a significant amount of shut in production may now come back on line, which is perhaps grounds for delaying the update.

Morning all,

I would assume that like me there are a good number of investors here who struggle to appreciate the Lemur Coal project, mainly due to the ethical winds that are sweeping through the world right now.

The vast majority of the discussion here is quite rightly centred around the vanadium and the green credentials that then drives. I am sure that investors would much rather have an update on BE or BV than on Lemur. Heck even the house broker to date is offering zero credit on it's broker notes.

If Lemur were a separate entity, be it likely with a completely different set of investors, it would be held in far more greater esteem than it is right now.

Whilst it's contribution to the BMN stable has been systematically ignored by the market, it has quietly gone about achieving a number of key milestones that would be the envy of some corners of the market, and it has done it in Madagascar, a country sitting 155 out of 180 in the Transparency International Corruptions Perceptions Index of 2017.

Yet Lemur, operating as a perceived add on to the main show that is vanadium, has ;

1. Secured a PPA agreement with the state utility JIRAMA.
2. Secured a concession that "gives IPP the right to build, own, operate and supply an initial 60 MW in Imaloto"
3. Received a draft BFS from its Chinese parnter Sinohydro
4. Received "Expressions of Interest ("EOIs") for finance and political risk insurance from two financial institutions."

"The Concession, gives Lemur the right to build an Evacuation Line of up to 138kV for the transport of the electricity to the connection points."

"The Concession enables granting of the right of way and any land use authorisation for the required infrastructure from the coal-fired power plant to the connection points."

"The Concession also contains provisions for lenders' standard terms and conditions to ensure the bankability of the project."

"In June 2018, Lemur's technical development partner, Sinohydro, submitted the BFS for the project which is a critical consideration for the funding phase."

"The BFS is currently being reviewed by an independent consultant"

Whatever I may truly feel about this project, to value that level of progress at zero pence is simply wrong and business is business. The Coal project already has considerable value and as the quotes above demonstrate, the project has delivered all but the final piece, the BFS.

The offtake and the concession are giant leaps in terms of giving the project a key customer and more importantly the regulatory might to get the project built.

The Lemur update was 'expected' last week. It hasn't come. The only key development right now for that project that really matters, is that BFS. It's been under review 4 months and my spidey senses say it must be very close or the update would be here. So something is afoot and when it comes, I expect impact, because zero pence just doesn't cut it.

If it's not too late and its not already taken, then I would like to choose 30th Oct 2019.

£200 win or lose.

Is it really big sells, because I don't see them. All the sells are automatic trades of which there are a lot for AMER at the moment. Each one appears to drive the price misrepresents the fact that buys are clearly outstripping sells by a country mile.

I have bought regularly over the last few days and done multiple dummy trades to check the current pricing, believe me it is a sea of buys. Yet the SP is so easily driven south.

I even tried a dummy sell at around 4.15pm and the price was so low I took it. Dropped like a stone in the last 30 minutes of trading and buying was good enough to hold it.

There has to be a big seller behind it all because it simply doesn't add up.

Jointhedots excellent research and thank you for sharing.

Thinking clearly about the situation, the very last piece of news this company released was a new and surprising oil discovery, that the CEO describes as an "exciting and very positive result"

A result that clearly has more to come from it, and is the most relevant in terms of near term news flow.

"In line with Company standard practice the well will be observed at these stable parameters for at least a further three days, after which a downhole pump may be run to provide some lift to the well to optimise flow parameters."

Yes there is always the chance that the company is saving up bad news, as there is the chance of pretty much any physical possibility out there. However, with such a surprising result having just been communicated, the percentages point to it being central to any further update. Why that means delaying the production part of the update I don't know, but that is, in my opinion, the clearest answer.

Whilst the market fires burned so brightly yesterday hammering some very worthwhile AIM stocks along the way, my attention was drawn not to those stocks that seemingly offered opportunity driven by their retrace, but to those that barely moved at all.

BMN was one of those stocks, losing just 0.36% whilst good stocks with strong fundamentals lost 10%. That says a lot about BMN's current valuation compared to what the market really thinks it is worth.

With BMN's reporting season is upon us, that signal says to me that it won't take very much to set this share off once more.

@lezzils well I guess that would depend on the reasoning behind the drop to 5p now wouldn't it.

I'm sorry that LTHs here have had such a rough time of things, I've been there, it's not nice, but I won't apologise for airing my opinion or for taking a position at what I see to be a good entry point. If this was trading at 20p, I highly likely would not be saying strong buy, but it isn't, it is trading at 12p, my entry point.

It dropped 18.5% on news of a duster that turned out to be 600 bopd of oil that is spilling from a zone that is not included in the current reserves. That's overnight a 12% increase in production.

Since then it has lost another 2.25%. So it's nearly 21% down on good news.

On the way back up that's 25%.

On production, costs, current realised oil price, it should be trading above 20p, but it isn't it is at 12p.

That's minimum 60% uplift.

Does that mean that it is a great long term investment? No it does not. The BOD haven't earned that trust. But does it mean that at 12p it's a bad bet, that it is untouchable. No it does not.

Given the existence of a large seller and given their current holding, given the support for the current oil price, given the free carry drilling campaign, given the chances of Pintadillo-1 bringing in even more oil. . .

IT IS IN MY OPINION A STRONG BUY.

It is currently 11.74p to buy. Bid and Ask all over the place, and yet I can only buy on a limit order, as has been the case pretty much for the last 2 weeks.

If so many are selling, then why is there no stock?

I would also point out taht I am by no means alone in my pursuit of shares at this level. There are multiple buyers around and still the price refuses to rise. It's quite extroadinary to behold.

@leas he may not be a distressed seller in terms of his needs but the price action points to a situation where he is certainly acting like one.

Every pause in buying leads to a drop on the ask. It has been going on for at the least the last couple of weeks because I have been a regular buyer in the market, and all the pressure to the downside.

Of course there is always that chance that someone else is involved in some shape or form, but i am convinced that isn't the case. So whilst I take your point, I stick by my original point, which incidentally is backed up by the observation made by Docisacoc.