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Sorry but I am going to have to comprehensively disagree with the notion that Mokopone will be developed as a greenfield mine and processor.
The December Annual Report is very clear on the direction of the company, one need only piece together the wording.
Page 14 states : “The intention is to secure a mining right and develop the project as a greenfield mining and processing plant; or as mining operation supplying ore to China and or other brownfield processing plants.”
The above statement in part supports the notion that the company ‘may’ develop Mokopone as greenfield. However, the company also states on page 8 that “The Company’s deposits exist in close proximity to brownfield processing and logistics infrastructure creating scope for low capex and quick scale-up of production capacity.”
This is further backed up by the most telling statement on page 14, whereby they say ;
“Through its expansion initiatives at Vametco, as well as targeted brownfield opportunities, the Company is looking to expand it production to 5,000 mtV by the end of 2019 and to more than 10,000 mtV in the medium term.”
That say very clearly that the medium term plan is for 10,000 mtv, that Vametco will provide the first 5,000 mtv, and the additional 5,000 mtv will be processed with brownfield processing.
Then on page 22 there are 2 key messages. Firstly, the company states “The Mokopane Vanadium Project is a key part of Bushveld Minerals’ vanadium strategy.” You don’t say that and talk about 10,000 mtv medium term, if the two aren’t part of the same package. It isn’t logic that Mokopone forms part of another phase that takes the company beyond 10,000 mtv, it’s possible but highly unlikely.

@Wisha Q3 finished effectively 4 weeks ago and i have the mid price was circa $78.70 per kg.

I applied the same methodology previously with H1 and posted here more than once that the mid price was circa $61,500. The actual was $60,800, so close enough to continue employing said method.

So a healthy step up in EBITDA for Q3. It’s now simply about what they were able to produce and sell.

My own view on the potential for a pull back is that if it does happen it’s going to be minor this time around. There is too many developments signposted for this year and time is running out. Therefore, the window to take advantage of a drop for me is smaller and the percentages are against it.

BE and Lemur updates should start from next week, and that BFS cannot be far away. Also, the Mokopone license could land any day, which in my opinion, is the catalyst for much bigger things.

There have definitely been opportunity for such moves in the past, and I’m certainly not criticizing or questioning anyone’s strategy. It’s simply my opinion. 10% pullback perhaps but I think the developments of late will quickly gobble up any weakness beyond that.

The developments at AV has pushed me to re-visit the list of anticipated producers as listed in the BMN Vanadium101 presentation.
Seeing as we simply cannot drag ourselves away from this BB, I thought I would test the willingness of the learned contributors to help me fill in this list with the actual projects, and establish the exact stage they are at, and their actual timelines to reach production.
The list comprises 46,000 mtv of additional production, which is 88% of identified new production.
Here is the list (Name/Type/Stage/Measured-Estmiated Resource/Production Date/TPY):

1. Mokopone - Primary - PFS - 2022 - 63 mtv - 5,800 tpy
2. Canada - Co-producer - Feasability Complete - 152Mt – 2019 – 4,000 tpy
3. Australia - Co-producer - Feasability complete - 306 Mt – 2020 - 5,600 tpy
4. SA - Co-producer - Feasability Complete - 50Mt - 2018 - 191tpy
5. Australia - Co-producer - Feasability complete - 140Mt - 2020 - 11,200tpy
6. Australia - Prmiary Mineral Discovery - 35.6Mt - 2020 - 5,300tpy
7. Australia Co-producer - early exploration - 185Mt - 2020 - 4,800 tpy
8. Canada - Co-Producer - PEA Complete - N/A - 2023 - 9,331tpy
Nr. 1 is our very own Mokopone with possible production start of 2022. I am most keen to establish numbers 2, 3, 5 6 and 7.

By establishing who these projects are and where they are at, we can perhaps establish where vanadium supply and prices are truly heading.

Answers on a postcard please.

@Milkman87 just a quick word to say well done on the Corbine Cup, £200 will be on its way soon enough to what is a great cause.

Sorry I should add that that date does not allow for delays due to funding constraints, environmental permitting or construction delays. So it’s best case.

In all the excitement associated with BMN today, I note AV have released an update on their PFS, which is due for completion at the end of 2018.

Total build costs are estimated at US $360m with an expected production of 10,100 tons of V205 per annum at US $4.13 per lb.

Key point to note is that construction is expected to start in 2021 and production in 2022. Even if they make January 1st, that’s more than 3 years, and I consider them a solid, well organized and advanced project. 3 years!

@Daisan you are absolutely correct, I have used the Q2 figure as my start point.

The difference should be $81,700 - $60,800 = circa $16,450.

Therefore the revised H2 EBITDA would be $9.47m higher. Thus the revised H2 EBITDA would be £58.2m + £7.2m = £65.2m and full year of £97.1m

Thus the EBITDA multiple of 5 would give £485.5m (43.8p) and the net profit would rise to £64.7m.

Thank you once again.

To place all of what I have written into context, the SP should be trading north of 40p based on a very conservative valuation of just what Vametco means to the business.

A factor of 5 for EBITDA or 7.5 for the PE ratio, simply cannot stand, even in SA, because it essentially says that Mokopone has zero value. ARC at a 10% discount and 80% of the value removed due to the level of progress and details on the project, still have a 5.7p valuation at $68 per kg FeV and $35 per kg long term pricing.

The mining right alone will double that in this environment.

That’s just one example of many that will mount an assault on that ‘absolute base case’ 40.5p scenario. There are many more.

The boy is becoming a man.

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The interims state that the unprotected action may impact production and cost items, not profits. Thus the sales could well meet the high end of the guidance.
Plus if FeV stay at ‘just’ $100 per kg for the next 10 weeks, then the average H2 FeV price will increase to $88.75 per kg. Thus, adding another $7.9m (£6m) minimum onto the EBITDA figure.
So all in all, the company really doesn’t have to do much very different, to achieve a minimum base case £20m increase in EBITDA in H2, giving a total of £51.7m in EBITDA for H2.
However, that is all based around 59.1% ownership. The reality is that figure needs to be adjusted to take into account the Sojitz buyout. That should add a further 25%, although the exact timing of its inclusion is difficult to fully assess.
If we say it covers only Q4, then even on a 50/50 shared basis, we should be adding a further £6.5m. However, Q4 will most definitely be stronger than Q3.
So we are then at £58.2m in EBITDA for H2 and £89.9m in full year EBITDA.
Where does that all leave us then? Well ARC state “Single-asset junior miners typically trade at 4-6x EBITDA”
If we take the middle point then BMN should by year end be trading at circa £449.5m just on the base case, so 40.5p.
If we take it from a profit position, then BMN is converting 66.6% of EBITDA into net profit. That means at £89.9m, they should achieve circa £59.9m. Apply whichever PE Ratio you like to that, but a ratio of 7.5 would at least realize the above EBITDA conversion figure of 40.5p. That isn’t very trying.
But for how long will BMN be a single asset junior miner, and for how long will BMN be producing just 2,806 mtv. Next year, as a minimum, should see guidance back up to 3,680 mtv, so circa 31% uplift in production. with a likely starting base of absolute minimum $100 per kg.
And then of course there is the expansion programme and the mystery that is Bushveld Energy.

Lots and lots of upside even from such a conservative base case position.

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Good morning all,
The key points I would like to add is that these figures give us all the base case scenario from which to calculate the future, starting with H2.
I haven’t got into the nitty gritty yet but in essence, BMN has delivered 10.2m in FCF against the following actual figures :
Actual price achieved : $60,800 per mtv
Actual sales 1,403 mtv
Actual cost per kg ZAR 248
Actual ZAR/Dollar exchange rate : ZAR 12.3
The current average realized mid price for H2 is $81.70 per kg.
The current production is anticipated to be between 2,850 -3,000 mtv, but this could be impacted. I have always based my calculations on achieving H1, so no change at 1,403 mtv produced and sold.
The cost guidance for the above range is ZAR 240-250. With the strike costs, I would say keeping the same cost as H1, is about fair.
The H2 current average exchange rate is 13.85.
Vametco in Q1 made EBITDA of $22,875 at an average sale price of $51,550 = 44 %
Vametco in Q2 made EBITDA $36,900 at an average sale price of $69,370 = 53%
But the key is the jump. There is $17,820 difference in price between Q1 and Q2, of which $14,000 was converted into EBITDA. That’s 78.7% conversion.
Therefore, even ignoring the fact that FeV prices will likely hit $110 per kg this week, the current H2 average of $81.70 delivers a further minimum $9,700 in EBITDA per mtv. That’s a further $13.6m even if BMN do nothing more than repeat H1 performance.
But in addition we have the exchange rate and those production costs.
Q2 production costs were ZAR 268, which at the Q2 exchange rate of 12.6, gives a production unti cost of $21.270.
Using the H2 figures, we see an average ZAR 248 cost at 13.85 = $17,900. That’s a reduction of $3,370 per mtv and $4,73m in total.
Thus EBITDA should increase by $13.6m + $4.73m = $18.33m, which is circa £14m at the current dollar/pound exchange. But I reiterate, that is as an absolute minimum.

Block16legend I must admit I was pleasantly surprised by the fact we held above the 30p line yesterday. That means in one fowl swoop we broke two psychological barriers in one day, resistance at 28.5p and the 30p round figure.

It remains to be seen if it holds today, but if it does then yes I think there will be a push we’ll into the 30s.

In terms of being late to the party, I don’t personally believe that is the case. There is a great deal still to come from BMN and I am more convinced than ever that the £1 billion mark will be passed next year. But even that should still only be a stepping stone to even greater things.

All just my opinion of course

@AIM_Chaos Noted, respected and appreciated, but there is a journey to be finished here first and it's only now truly coming into its own.

And what Eskom is gearing up to sign off a long term agreement with an IDC backed VRFB project developer, to cover upto 2,000MW of required energy storage schemes. Thus enabling it to better integrate current and future IPP renewable projects. That said developer will be the preferred contractor for all future utility scale energy storage projects at Eskom.

Thus enabling future REIPP rounds, of which number 5 is in the pipeline, to incorporate an element of battery storage to ensure greater efficiency from these projects and therefore far less reliance on faltering coal supplies.

Is that such a far stretch of the imagination?

Eskom is testing battery storage technologies to answer that upto 2,000MW call. Only 1 technology can really be the winner, and there is only 1 company in the running, the company that is testing its technology there already. That company is backed by The IDC, promises wide scale new jobs and beneficiation of local minerals.

That same company has already started to plan to build an electrolyte plant, with The IDC, and it is purchasing a site that is drawn up as a VRFB facility, not solely an electrolyte plant. They must be very confident of getting orders from someone locally at least.

It’s all laid out clear as day in the information to hand. Yes it may be scaled at first and yes it will take time to implement fully. But the announcement will be more than enough, and if it’s anywhere near to what I have just alluded to, then this stock is heading way way beyond 30p.

@Kevkan I would encourage you never to forget what you just posted because it is for me, a clear sign of where Eskom is heading and how much it will eventually favour BMN.

“It has also reiterated that the new corporate plan will be fully aligned with the revised strategy, which will seek to make Eskom’s business model more responsive to technology changes in the industry, as well as the risk of a “utility death spiral”.”

@Coffeecups yes I am most definitely building up my presence on Twitter moving forward. Will look you up.

@Faramog I am looking into something regarding the brownfield as we speak. Will likely have more to share next week when I have more time. That is if the company doesn’t beat me to it.

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The key in all of this is that BMN will now own the maximum permitted percentage of the one project that has a mining right application in play, Caber Trade. That the mining right is now free to be concluded by the DMR (dispute is over), and that it is there where Vametco will commence mining the cheaper near surface ore that it needs.
I have for some time wondered why and how BMN could continually make statements regarding Brits ore being fed into Vametco, when such a large percentage of Uitvolgrond is in the hands of a BEE partner that is not aligned to the company’s philosophy. Yes it was also possible but it would always mean the need for an offtake of some sort.
Well their ability to take full control of the one farm that has a mining right in play, completely removes that question, particularly if Jaxson 640 becomes the new BEE partner.. How they did it and why this has not been communicated via RNS is a mystery, perhaps it is building up to an announcement when the resource is announced, I don’t know. What those figures clearly demonstrate though is that things have moved on at Brits, BMN’s share of the prize got a whole lot bigger, and their ability to feed ore directly into Vametco without much conflict, got a whole lot easier.
Food for thought once more.

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I have found something rather interesting on the BMN website. Under the Brits Vanadium Project it is stated that the company’s interest in 2 of the 3 projects that compromise ‘Brits’ has changed.
Great Line 1 owns Portion 3 Uitvolgrond – Sable Minerals (previous owner) interest was 70% and BEE 30%. Now 65% BMN ownership.
Caber Trade and Invest owns Portion 2 of Uitvolgrond – Sable interest was 51% and BEE 49%. BMN website states 100% BMN ownership.
Gemsbok Magentite Ltd owns the remainder of Doornport – Sable interest was 74% and BEE 26% - Status No Change.
Portion 3 is immediately next to Vametco, portion 2 is then next to that. So they are the key project areas at Brits and those that are currently being drilled by the company.
According to the Admission Document ( yes remember that), there were two main goals in play. The first is the Mining Right application for portion 2 of Uitvolgrond. This was being held up by a community dispute over the failure to transfer ownership to Caber Trade.
In addition, under the Section 11 application, it is stated that the BEE partner for Gemsbok has agreed tag along rights and also agreed to sell their shares, meaning a new HDSA partner is required. The company states that Jaxson 650 (I take this to be a typo as Jaxson 640 are the Vametco partner) has agreed in principle to do this but the transaction was, at that time, still to be completed. There is no mention of tag along right for the other 2 companies that make up Brits.
So what does all that mean? Well the fact that the percentage ownership of Portion2 has changed to 100%, demonstrates that the issue with the community is resolved, because they could not achieve that change until the dispute was over. It also demonstrates that the original BEE partner is no longer involved, meaning BMN’s stake is now 100% with up to 30% to be transferred to a new HDSA partner. We know this because the only original BEE partner that instigated tag along rights, was that at Gemsbok, which also means that the new 65% to 35% provision at Great Line 1 is also a new arrangement with a new BEE partner, for the very same reason.

@Sanchez599 yes indeed.

The H1 figures will of course be very interesting but I am keen to see the wording, and in particular the production guidance figure. If the top end of the previous range (2,850 -3,000 mtv) is maintained, despite the 2 week shutdown, then the market has no more excuses, and everything shift up yet another gear.

As is very often the case with bmn, i like everything about that RNS. I like how solid a deal it is, how fair a deal it is, but most of all i like the timing.

With H1 results coming next week, and Lemur and BE not far behind, it felt to me important and advantageous to get the strike over before this weekend. To then have it so tightly wrapped up so that the market has only one way to take it, is even more impressive and decisive.

I still believe the H1 results are more about the message than the numbers, because Q1 was nowhere near what Q4 should be. But that said they won't be shabby by a long way, and what they will give the SP is strong momentum off the back off Sojitz and extremely strong FeV prices, as Q3 updates then take over.

I am expecting a great deal of developments and excitement between now and year end, and it all starts today. I also believe that today was the kingmaker, the key moment that many will remember as being the point at which the reigns were truly let go.

So it may just be the weekend that that defibrillator finally needs purchasing because it is my opinion, about to get very real around here.

Finally, I would add that it's perhaps wise to spend some time this weekend reviewing what one wishes to achieve here, what are the goals,have they changed. The numbers are going to get very heady and the mind will play tricks, so pick a strategy, test it, approve it and implement it, because it may get very cloudy otherwise.

That's not advice that's just my opinion.

See you Monday everyone.