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According to this article, whose overal rhetoric is one of extending the policies of equality and inclusion, the proposed 30% BEE content is only on ‘new mining rights’ It remains to be seen what the final charter looks like and how BMN react, but as it stands Vametco should not be affected and both Mokopone and Brits already have more than 30% BEE compliance, be it not broken down as indicated by the new proposals. https://www.google.de/amp/s/www.businesslive.co.za/amp/bd/opinion/2018-06-14-mining-charter-must-include-free-carry-on-all-mineral-rights/

There is seemingly still much discussion as to whether VRFBs will deliver the sort of numbers EV batteries are already demonstrating are possible. The key for me is China. We can discuss SA policy, US policy, EU policy whatever, but the reality is that all BMN really needs to deliver sufficient additional vanadium demand is China. Yes I would of course dearly love to see VRFBs to succeed the world wide, and they will if China firstly pioneers the technology on a mass scale. However, to be brutally honest I can make a silly amount of profit from BMN so long as the demand stays well ahead of supply and BMN are able to expand into it. China regulations with regards to VRFBs are already streets ahead of much of the rest of the world and certainly ahead of the other large scale markets of the US and EU. So the door is already open. As an example of what can happen once China sets its mind to it, we need only take a look at EVs. As of 2017 Germany had 25,373 public EV charging stations in service. The UK 16,553. All of which gave the EU some 130,000 stations. The US being a much larger potent market had just over 47,000 public charging stations. China in the other hand had near as damn it 214,000. So considerably more than the EU and the US combined. In addition in 2017 the US sold some 200,000 EVs, the EU 287,000. But both were dwarfed by China which sold over 600,000. I have no doubt that VRFBs will carve out a market across the globe but my point is I don’t really need to see it happen. All I need is for China to bring the same direction and drive to stationary storage as they have done to EVs, and that for me is as much a given as I could possibly hope for at this particular point in time, all I need do is watch and wait.

@Alfacomp the European mid price was $71.50 per kg FeV and the US mid price was circa $34 per lb. Monday’s sharp uplift was the key move for me, backing up last week’s strong gains. As it stands the US should record a converted trade figure of $80 per kg this week. My view is that this is simply buyers returning to the market after a sustained period of waiting it out. Yes they may be thinking ahead to the new regs but I doubt it’s having much influence yet. Also the environmental inspections only started on Monday of this week, so again their impact won’t have been felt yet. I expect we will see far more on that front as winter begins, as that is when the main curbs, if any, will be requested. https://www.vanadiumprice.com/mb-non-ferrous-price-changes-08-06-noble-alloys-bulk-alloys-ores/

@Alfacomp I believe that is, bevig conscious, something of an understatement. If these environmental inspections have even 50% of the impact they had last year, then that combined with the new rebar regs, will add considerable pressure to prices. In Juky last year those prices began their climb from $27 per kg. This year the starting position is $70. I hadn’t previously appreciated that such a strong and sustained campaign was planned by the Chinese authorities. It’s therefore difficult to see what will prevent prices from breaking that $100 per kg.barrier.

Here is another article with additional details included. Around 18,000 inspectors and support staff will be employed for the endeavor, tripling the workforce of the inspections carried out during the past winter. "The intensified environmental checks will focus on industrial, energy, transportation and land-use sectors, and continue to enforce production staggering“ There is a very big storm coming. . . https://www.telesurtv.net/english/news/China-Expanding-Environmental-Inspections-To-More-Regions-20180609-0014.html

Yesterday marked the commencement of a new and larger set of environmental inspections, which will include industrial plants and be focused, among other places, in Hubei Province. It is due to run until April 2019. Could we be about to see even greater pressure brought to bear on Chinese production of Vanadium. I will be keeping an eye out for messages in the weekly Vanadium reports, but I cannot see how there won’t be at least some affect, particularly as winter kicks in. https://www.google.de/amp/s/mobile.reuters.com/article/amp/idUSKCN1J506F

My word my phone thinks some funny things at times. Apologies ‘do more good than harm’

@Sanchez the way I see it, SP Angel are a distraction and have no true bearing on the final outcome here. They do not good than harm but they have shown their weaknesses by stating such things as Vametco having a 3 month lag on prices. If anything their lack of understanding should be taken as a compliment as to just how detailed the knowledge can be on this BB. This BB worked it’s way this sort of discussion during the 1.3p and then the 10p days. Each time the fundamentals have demonstrated themselves to be far stronger than the credit given and each time the SP has re-rated to the next appropriate level, whatever the final trigger may have been. Right now we are 6 weeks into a very healthy consolidation period and the SP has held above 18p. That’s very pleasing indeed. The discord between the fundamentals and the SP this time around is even stronger than it was at those lower levels because the predicted outcomes have come to pass and the proposed developments in the business are much further down the line. BMN is literally awash with cash and potential, such that all we are really doing is filling time while we await the next abundantly clear re-rate. Just like we did at 1.3p and 10p, and nothing SP Angel says or does will change that. All they can and will do is try to stay ahead of the game as the next rise kicks in.

@jjhbev Good evening and apologies it took so long getting back to you. I have written two long responses but to be quite frank I believe its a waste of both of our times me posting it all in full. In short I do recognise your point that earlier quarters demonstrate costs, be them operating or something else, that increase the total operating costs to above the guidance figures in the Admission Document. However, I would caution against employing both a single quarter and in particular Q4 as the basis for setting the operating figure for 2018. For example if you review Q3 you will see that against sales figures of $31,300 per mtv, Vametco achieved EBITDA of $9,300, which means total costs for that quarter were $22,000 against $25,400 for Q4. What that demonstrates is that over the course of the year the costs will fluctuate and it is the overall guidance that we should be following. There are no doubt accounting games being played out, particularly in 2017 with such an array of owners past and present. That is why I posted my thoughts on FM's statement at Mining Indaba because the figures do give mixed messages. But despite this, FM made what for him is a very bold statement that at $60 per kg and at current costs, Vametco was capable (caveat noted) of generating EBITDA of $150m. There are expansions plans to be paid for and perhps as you say other costs here and there, but at the same time the average FeV price for 2018 is already well above $60 and we are past half way in the year, plus I have no doubt that US prices will also play their part because they are showing a greater discord with Europe in 2018 than they ever did in 2017. With all of thatb in mind I feel very confident that EBITDA of $150m can be employed as my base figure for 2018 with substantial upside possible, and that is all that truly matters here because it demonstrates that BMN is cheap and that the current SP range cannot hold for very long.

3,680 mtv for 2018 of course

@jjhbev sorry but I disagree. You are quoting Q4 2017 as a basis to determine a 2018 figure. Q4 was a sacrificial quarter in which maintenance was undertaken to allow the company a better run at the stronger prices expected in 2018. Therefore the production cost figure is based on just 539 mtv produced, where as Q1 was 730 mtv. Plus the company is reporting production guidance of 3,680 mtv for 2028, which as the quoted slide states will reduce production costs to ZAR205 for 2018. Therefore the production cost stands so that the only debatable cost is the additional operating costs taken from the Admission Document, but I am certain they are close enough to warrant further use. For clarity slide 10 of the Cape Town presentation states : “CY18 production cost expected to decrease by 7% from ZAR221/KgV to ZAR205/KgV, mainly due to economies of scale”

To add. I am saying this not just because BMN is in production but because BMN is in production at a time when profits are so high that the cash flows enable much greater expansion than at other times. But! More importantly o say it because of what BMN has atvits disposal. The size and quality of BMNs resource plus it’s level of progress, plus the ability to leverage local brownfield, means BMN has all the tools to become the largest and most significant producer of V in the world. What that in turn allows is for BMN to control the market dynamics by switching production on and off. Vanadium right now is still relatively small in scale as an industry but it soon won’t be and BMNs status within that larger industry will be clear once their expansion plans are fulfilled.

Sorry major error. That should have read ‘I would not call it a difficult question’

@Cindercone i would call it a difficult question in the sense it’s an uncomfortable scenario. We are talking more about a choice being made to sacrifice profit in order to stimulate VRFB take up. For me BMN has to take up the challenge otherwise the good times will be relatively short lived as eventually new projects will come on line and supply will increase, thus reducing prices. That said BMN is on the inside looking out and has the ability to influence the pricing environment through its supply. That for me is absolute key here. New projects have to try to navigate their projects and their larger CAPEX through this pricing environment. The moment supply rises significantly they potentially may find themselves lost at sea. What a larger BMN can do is reduce output to trigger better margins but not at the expense of allowing too much new suppl entry to the game, and with the current timescales involved, BMN has a big enough window to realize that growth and become a swing producer of sorts. That aside, the higher that V prices go in the short term, the more tonnage BMN can relinquish to VRFBs in order to stimulate the demand and drag VRFBs into the mainstream, without impacting overal profits too much. Once there, the increased demand for V allows BMN to expand their mining arm further and realize a higher long term V price, whilst enjoying revenues from their Energy Storage division. Of course that ignores giant VRFB parks in China and/or leasing. But even without them BMN has enough time to establish a dominant position in the market place and help control who has access to the circle. A simplistic explanation given where we are but in essence that is the opportunity BMN has. Large front end profits that allow profit to be sacrificed if necessary to stimulate a new market and, allow BMN to grow their influence in the overall market place through expansion, which in turn brings greater economies of scale and swing production status. Once at that level BMN can pump high grade low cost ore/concentrate/product into the market at lower margins but far higher profits through scale, and it is this period right now that provides the time and resources to achieve that position. Only my opinion mind.

@NickD my tuppence’s worth to add to your contribution. As we are now aware, FM made a statement in February during his 121Mining presentation regarding the capability of Vametco delivering $150m EBITDA in 2018. That same presentation clearly stated that the average price of FeV at the end of Jan was $60 per kg. In aflddition, Vametco production costs for 2018 are expected to come in at ZAR205/kgV. (See slide 10 below). The admission document for the YD buyout stated clearly that the total operating costs for Vametco amount to approximately ZAR250/kgV when Vametco runs at 3,750 mtv(see pages 243 and 245). Yes we are talking about 2018 here so only 6 months at 3,750 mtv but it is clear from the admission document that ZAR205 is an improvement on the plan, when compared to the additional operating figures shown on P.245 under 2019. That total cost at ZAR250, at ZAR12 per dollar equates to $20,800 per mtv. A simple add and subtract delivers $144.26m at European mid price $60 and 3,680 mtv produced. There is of course the question of investment, with upto $17.5m being invested in the expansion plans. However, we must take into account the premium on Nitrovan and the fact that mid price in this pricing environment is the minimum the company could expect, and the fact that these 50% sales being shipped to the US cannot be ignored, because prices there have remained much stronger than in Europe this year. Therefore that gap that gap to $150m if indeed it exists, should easily be filled. That aside the above is why I have been so keen to remind everyone that at the half way point of the year the possibility of that $150m is very much real, and is further supported by the recent price increases to north of $70, such that personally I am planning it more as a minimum expectation for 2018, because it’s very doable. http://www.bushveldminerals.com/wp-content/uploads/2018/02/BMN-121-Presentation7861.pdf

@FB indeed. I will be particularly interested to read the section entitled ‘events after the reporting period’ Given what has happened since the end of 2017 and what is due to be completed by the end of June, these accounts if nothing else may well act as a catalyst for other announcements. Whatever happens they will at the very least signal the start of a very busy and significant period in this company’s young life.

Yes indeed NickD but the most significant factor is that Vanadium pentoxide prices are now at $15.80 per lb mid price in Europe. I read various reports over the last couple of week, that reiterated the message that FeV producers in China could not produce at profit because their raw material, the V205, was so expensive. Those V205 prices essentially stood still for a sustained period. It was the FeV market that slid back. But now V205 prices are up a further 10% meaning those FeV producers need an even greater rise in prices to cover their costs and secure a profit. And if that weren’t enough it looks like US FeV will break $80 per kg this week. I believe the market is very much awake to this situation given Vanadium’s greater media exposure, so I think it’s more a case of investors waiting to see where BMN bottoms out at. Once it starts to move then I believe buying will pick up substantially and the assault on 30p will begin in earnest. It is simply just too clear that Vametco is making very good money.

@Loudspeaker great minds and all that. . .

Good morning. For those with less time served monitoring Vanadium prices, the size of the percentage increases being seen at these levels are very significant and say far more than the individual affect they have on overall prices. In my opinion today’s jump is particularly significant. We now have every chance of seeing $80 by the end of the week. http://www.asianmetal.com/VanadiumPrice/Vanadium.html

I have just had a close look at the Junior Indaba presentation and there is one key change that is for me significant. On slide 5 the company has defined the borders for the 1000MWh by 2020, and they do not include the anticipated electrolyte production. That means that as of June 2018 the company remains confident of achieving said 1000MWh through either ; 1. MW scale energy storage project development 2. Deployment models include PPAs, leasing models That is a very clear signal as to the company’s confidence of securing substantial contracts from Eskom and/or PPAs and/or leasing models. I only assumed that the electrolyte sales would form part of this goal but that is not the case. BMN is aiming for upto 250MW of VRFB projects by 2020. Wonderful.