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@Sanchez I respect what you are saying but the comparison with Largo has worth if for nothing else than to give a basis for BMN’s valuation and what can be expected as a minimum. They are our closest peer producer. They do what we do. However, you are absolutely right about BMN’s greater depth in terms of its intergrated model, but we have to start somewhere and she is a complicated lady. Plus right now the intergrated model is immeasurable because ; a) no one else is doing it b) it has yet to be realized in terms of asset value and revenues. The reality is this share has had a strong rise through to 23p, it is taking a justifiable and sensible breather before the next leg up, but it may not last very long. Everything we have discussed here these last few years regarding undervalue, thus far has in the end come to be realized in the SP, all the way from 1.3p. If it looks like a winner, acts like a winner, then it is a winner. This stock has an abundance of positive drivers sitting waiting to be realized, and they will move the SP substantially higher. Whether visitors to this BB want to see it or believe it is entirely up to them, but their choice won’t have any real bearing on the SP in the end, because the fundamentals and the number of drivers are just too damn good. We are seeing and calculating a £1 (a mere rounded figure employed purely for its simplicity) plus company and that is what is going to happen. What we do in the meantime is pass the time by attempting to claw together the many angles here in an attempt to establish a valuation. But it’s just chatter to fill the void until the next leg hits, which as always will still take many by surprise despite it being repeated over and over again here, that it will happen. We are comparing Largo to BMN with just Vametco. But imagine BMN with Vametco and Brits, Mokopone, an electrolyte plant, and a VRFB development business.

@Daisydog I believe your appraisal to be a little hard. It is unfair to compare the warrant holders of an established producer against that of a new producer. The majority of the BMN warrants that exist from the hard times, those being when the company had nothing and needed everything, would naturally be exhausted because the owners aren’t about investing for the long term. They therefore have a natural burn. But note that Wogen have not cashed in their warrants, which at 7p are over 200% in the money. Wogen know better than anyone what their warrants are worth and what BMN can achieve in the next few years. Also, a good percentage of the Largo warrant holders are their biggest shareholder ARC Funds, who own over 55% of the corporation’s share capital. They alone hold over 34m warrants and options. The disconnect is driven by the lack of numbers from BMN compared to Largos quarterly updates. However, Q2 production for BMN should confirm the basis for a very good set of interims. Remember Vametco is a cheaper producer than Largo and makes higher value products. The market however isn’t stupid and I expect it will start to price in the interims in the lead up to it, particularly if other SP drivers begin to be released, which it is more than fair to expect given how many possibilities there are. So the period between late July and end of Sept should see a significant correction completely separate to that which the other SP drivers should bring. It’s difficult to predict but there are just too many positives for the SP to stand still for very long. It’s simply a case of what and when it comes. But whatever the case, what the Largo figures give is an insight into what BMN is highly likely achieving, so it’s really a case of who blinks first.

Indeed and we are talking about a company that at the end of April 2017 had circa CAD $244m in debt, 165m warrants and options, and 517m shares in issue. That’s warrants/options upto 32% of the shares in issue. With those sort of net income figures the debt is now something of a side show, but it compared to BMN with zero debt and some 26m in warrants (2.44% of issued share capital) it’s quite a difference, and will demonstrate itself in time. My 30p date was based on the delivery of the 2018 interims. Whilst I may miss out on that particular prize, the date and period at the end of Sept remains significant because that’s when we will see the true affects of 2018 prices on the business.

I wanted to finish by saying this is a very talented set of guys/gals at the centre of the most exciting technological development since the internet, backe by a highly profitable business. Mind blowing

@Alfacomp firstly I must say these are very exciting times to be a BMN shareholder. We are all busy trying to oust the plans of the company before they are ready to share them, but this time around it is more sport than anything else because the investment decision has long been made. We are literally spoilt with potential/pending news items at the moment, which in turn allows for much discussion on how they all fit together. If it’s not the takeover of Sojitz and it’s implications for the business moving forward, then its Mokopone and it’s mining right, it’s ore off takes and/or it’s brownfield links. If not then then it’s the brownfield itself, what is it, where is it and what will it feed off. If we are in need of a break from that then we can jump over to the energy business and it’s planned electrolyte plant, it’s VRFB project for Eskom or it’s sales pipeline. Where they are, who they are with, how they will be sold. What is IDCs part in it all. Once discussed to high heaven, we have the luxury of heading back over to the Vanadium mining business and discussing Brits and its impact on Vametco, or its own tie up with further brownfield. Or we could just keep upto date with just how profitable Vametco is and what the money will be spent on. Or discuss when will dividends start? And if all of that is getting too much, we can have a thorough debate on the Lemur coal asset, it’s development path, it’s spin off and it’s worth. It’s simply staggering what is going on with this company given the backdrop of interest in Vanadium, VRFBs and the prices that BMN is enjoying. Now back to your very valid point. I agree that could well be the reason because it’s as good an argument as any here. I was out for a head clearing walk yesterday and I was thinking about the latest CEO Blog. It dawned on me just what BE has achieved in a little over 2 years, from nowhere, and what it demonstrates for the futurd success of the company. From nothing BE has tied up the leading VRFB manufacturer with ties direct to China and Rongke Power. It has captured the attention of the IDC, the biggest public backer of new enterprises in SA, and the holder of great political and regulatory sway there. Plus it has secured a demonstration battery for the largest utility in Africa by a considerable way, for a technology that is barely known in such spheres and certainly not regulated for. All in a little over 2 years. A tiny little enterprise with no previous project to employ as a benchmark. That is an incredible achievement and what it says for what they will achieve moving forward is quite something. I think we spend so much time analyzing what has and is taking place that we fail to appreciate the achievements and what they say for the company moving forward. Even more so when we add in Vametco, Lemur and even the tin. A very talented set of guys at the ce

@faramog I think the key thing to focus in on is the fact that a specific amount of cash has been raised, so the discussions must have been advanced enough to allow this figure to be determined. That said the equity raise was we are led to believe driven by interest from certain investors, that snowballed. The paying off of the CLN looks very much like a requirement/easy means of covering the first £4m. However, if the interest did then snowball then the company had to make some choices as to what was enough to cover their short term goals of developing Brits and taking out Sojitz. So it is possible that their hand was forced before the negotiations were far enough to determine the exact details. Whatever the case now that’s it’s in play it does present itself as the very easiest and quickest path to gaining more tonnage. So should be exhausted prior to more brownfield and greenfield development, even if they have to pay more than wished. So in my view it will happen. But the track record of the BOD has thus far demonstrated, that they are capable of driving a hard and often clever deal, even when the prize on offer is central to the company’s future, which this deal is not. I do also feel strongly that the taking out of Sojitz is the catalyst for everything else, because it is the stumbling block to adding further value to Vametco i.e. electrolyte, Brits etc.

@Daisan i have been giving more thought to our discussion on the Mokopone project. I do believe you are right that in this climate it has the ability to really push the SP north. What I also very much like is that with both the Mokopone and electrolyte plant projects, BMN has the ability to diversify its revenues. I believe this too will be high impact because it spreads the risk of disruption, be it still in one country. The electrolyte plant is particularly relevant because it’s success rate is intensified by lower Vanadium prices. The same will also go for the VRFB projects when they begin to gain traction. But upfront thd mining right has significant worth followed by a clear plan to develop the asset. If that plan begins with fairly low capex ore offtakes to existing processors (China being favorite), then the risks just got even smaller and therefore discounts to NPVs far more relevant.

@Bubbyhuxter to add to the already thorough answers from Nickd and Alfa, I would encourage you to review the following two documents. The first is Evraz’s buyout of Stratcor, which funnily enough carried Sojitz with it following their desire to “retain a strategic shareholding” In April 2006 Evraz paid Stratcor $110m for a 73% stake in the total business, which in turn brought Vametco with it. That business had estimated EBITDA for 2005 of circa $109m. What we are talking about is one part of that business but the correlation with the EBITDA is relevant. If you review the second document you will see that Evraz effectively purchased Stratcor based on the resounding success of prices in 2005, with European FeV reaching the heady heights of $128 per kg. However, the exchange rate in 2005 was far stronger than it is today at 6.36 per dollar, which countered some of this success. Still the takeover of the business that controlled Vametco, that was generating EBITDA $109m, during a period of the very highest prices, was still only priced at $1.5m per 1% gained. On that basis alone, Sojitz’s share on a like for like basis is worth at most $24m. But that is based on a majority takeover not a minority stake that Sojitz hold. If we look at it another way then at total production costs of circa $23,000,Vametco would need to achieve EBITDA of $29,600 per mtv (3,680) to achieve $109m for the year. That’s an average price of $52,600 per mtv. But that cannot yet be guaranteed even at these wonderfully strong prices. Therefore, the basis of the negotiation will for me be over what was achieved in 2017, because it’s is measurable and that was not $52,600. There are other factors in play such as the expansion plans, but as has already been said, Sojitz’s position is not as strong as one may think and the above interpretations demonstrate that the figure is likely to be far less that that $24m top end figure. Using a calculation against the YD buyout I believe I had a figure of around $13.5m and I still believe that is in the ballpark. The key for me remains in that ‘strategic shareholding’ So the key areas of discussion are likely to be their current 20% marketing agreement. What BMN have as back up is the ability to offer Sojitz a piece of the bigger picture through shares in BMN. Lastly, we must not forgot that the company has announced £6.4m specifically for this simplification of the corporate structure, so the starter for 10 is out there for all to see. http://www.evraz.com/media/news/1726/ https://minerals.usgs.gov/minerals/pubs/commodity/vanadium/vanadmyb05.pdf

So despite the minor but consistent drop in Chinese Ferro-Vanadium prices, US prices remain at a mid-price of $75 and European prices at $68.75. Really strong. I asked several questions of the company prior to the presentation, With regards to prices I wanted to know why the US Ryan Index isn’t quoted on the production reports, despite it being included in the Evraz ones. With over 50% of their product being shipped to the US, I asked whether or not the company was selling that product against the European index or the US. I feel this is information that is important for investors to gauge the success of the business. Perhaps an answer will be posted on the company website. Otherwise it will be a case of waiting until the interims at the end of Sept.

Good morning. Does anyone have a link to the presentation that they can post up? I am away from my computer but would like to spend some further time reviewing the content and don’t have it with me. Thank you in advance.

My final input for the week is this. In the presentation yesterday FM as part of his insights into their visits to China, stated that the Chinese government has stated that up to 10% of all future new wind installations must have storage technology attached. In 2017 China installed 19.5GW of wind power bringing their capacity up to 188GW. At 10% somebody has to find up to 1.95GW of energy storage. China is banging the drum of VRFB technology as the go to form of storage battery. So who do we think will get the vast majority of that business and who will be there to help them with their near 10,000 mtv?

SOTTR I did not go too deep into the EVRAZ and ZD payments because it would have made the assessment too difficult to follow. What I have done instead is set a high EBITDA allowance of 40%. My view is that BMN can likely reduce their tax bill to circa 25%. At $60,000 FeV prices that means the remaining EBITDA elements are coming out at $9,000 per ton or $32.4m, which is high. Over at SLP, the SA based platinum miner, their entire depreciation and amortisation stands at circa $5.4m for the entire year. There shouldn't be any interest because there isn't any debt. So even if we double the $5.4m, I have a float of circa $21m. I am no expert on EBITDA but I believe I have a more than high enough safety margin to cover all eventualities including EVRAZ. Like I say base base case.

Daisan I agree entirely. In this market and at these prices that sort of announcement will have seismic affect. I merely wished to strip everything back and factor in as much safety as possible to demonstrate what the starter for 10 looked like. We cannot measure sentiment or indeed the combined reaction of the market to Sojitz, brownfield and Mokopone. But if I am starting from a 60p plus baseline then I am very happy investor indeed. Incidentally I ran some numbers on the Mokopone mining and concentrator. The costs if one includes 50% of the overheads and logistic costs come out at circa $3,000 per ton of V205 produced. At $14 per lb any buzzer of that materials has got some $28,000 in margin to go at. If its the Chinese then we know that they are capable of processing ore cheaply, so a sum of circa $22,000 (high safety margin} is not unreasonable. If Mokopone stared off shipping 25% of the Mokopone PFS stage mine ore, so 250,000 tons, that would mean circa 2,380 tons of V205. That's $52m gross profits to negotiate a piece of, and a piece that would help secure a debt finance deal for the project. But of course the beauty of brownfield would mean that Mokopone could then remain as a mining/concentrator project and feed straight into that reduced capex brownfield processor. Meaning in one fell swoop the constraints of getting Mokopone past the financiers is effectively removed and BMN move one step further down the line away from those other budding finance hungry projects that have yet to find a way to overcome that very large obstacle.

One last point. I am confident that whilst FM appreciates the loyalty of his retail investors, he is keen to re-balance the share register with far more institutional investors because they are far stickier and reduce volatility. That is why when I do finally decide to part with a lump of my commitment here, I will be contacting the company and looking to do a deal at a set price. It will be far better for all involved that way and I am sure there will be welcomed recipients.

@Southernstorm I did some calculations a while back which i believe came out a total price of around $13m. There is minimum of $9m (£6.4m) in cash that was raised on 26th March.. The other $4m translates to £2.85m, which even at 20p a share is a tad north of 14m new shares, which is nothing. I might be wrong on the figures but the reality is at 23p a share and rising, we have nothing to fear in the dilution side of things. Mokopone is different but I do feel that the ore offtakes is the company’s solution for scaling the project into production. I also don’t see the processor being constructed for a good 3 year later yet, at which time the BMN SP should be far higher and much more capable of supporting a larger cash raise that will bring those in at these levels, far more reward than it removes. The most important thing is thus far this BOD have demonstrated a strong will to protect their investors from dilution, where they can. That bodes very well for all future decisions and for what it means in terms of the institutional investors upping their stakes and helping push the SP even higher.

(Sorry something got lost.) That for me is a very safe assessment, which demonstrates what I can at the very least expect from what is planned on the mining side of the business, without any enhancement from the clearly game changing energy storage,. It is my starter for 10 if you will, to be re-visited as more meat is added to the financial bones and these high impacts news items start to be revealed.

(2 of 2) 2020 By 2020, things should begin to change as supply from several external sources come on line. But for BMN that should not matter as 2020 is the first full year that the 5,000 mtv will be felt, thus drastically reducing the pricing level required to achieve the same result. Operating costs will reduce to $19,500 by increased economies of scale (as communicated by BMN in Admission Document Oct 2017). But it should be noted that by this point BMN will almost certainly have improved cost savings through Brits. My view is these will be another 10% or so lower than the above figure. However, again for the purpose of this exercise I will ignore these further savings and call them float. My assumption is that 4,900 mtv will be sold. Therefore, to achieve the same level of net profit as 2018 and 2019, the average price of FeV would need to be around $47,500 per mtv. A target that is not too testing given what we learned yesterday. By this point BMN should have additional revenue streams from both Mokopone through ore off-takes. The electrolyte plant will also be in its first full year of production and be adding considerably to the 2020 net figure. There is also a very strong possibility that VRFBs development projects will be contributing additional profits also. If that weren’t enough, the VRFB assembly plant should at the very least be under construction too. Now FeV prices may remain higher than those I have proposed but as usual I have employed ‘safe’ figures in order to test the investment case and my fair valuation. At £35m profits per annum and circa 1.1 billion shares in issue, I have EPS at 3.2p. At a PE/Ratio of 20, which given the energy storage angle, plus the then clear future growth of both the vanadium assets and the energy storage business, is for me very conservative. Two big disruptors to that are the development of Mokopone and the electrolyte plant. Both these projects should be adding considerable revenues to the business by 2020 alone with a view to increasing substantially through 2021-22. That will all factor into a far greater PE/Ratio. That aside at a PE/ratio of 20 the SP should be around 64p. That’s base case with everything stripped back and a high safety margin. ​ However, we have forgotten two very important things. The first is Sojitz and that additional 15% share in Vametco. That share adds roughly 24% to all our figures. Thus our £35m becomes £43.45m, our EPS becomes 3.95p and our SP 79p. Secondly, there is that additional brownfield asset. If it is Vanchem and I remain convinced that it is, then at a capacity of some 5,400 mtv, it has the ability to double everything we have just talked about above. Hence we then begin to talk about an SP of between £1.28 and £1.58. That for me is a very safe assessment, which demonstrates what I can at the very least expect from what is planned on the mining side of the business, without any enhance

(1 of 2) Here is why I am so delighted by what yesterday’s detailed presentation has confirmed. Firstly, it’s important to appreciate that as of today the average European mid price of FeV for 2018 is circa $61,600 and the current mid price is around $68,000. In the US the prices are closer to $70 and the average for the year whilst not calculated is certainly higher than $61,500. All figures provided below are my own calculations and are deliberately conservative in order to ensure any minor errors are covered so that the end figures have true substance. 2018 Average FeV price expected for 2018 is $60,000 Vametco production costs of ZAR 250 costs per kg @ ZAR 12 to the dollar = $20,800 per mtv. 3,600 mtv sold = $141.1m revenues At 59.1% ownership and an exchange of $1.40 to the pound, we have ownership of £59.6m in revenues. Tax is set at 28% but with all of the expansion works, investments in other areas of the business and thus tax incentives, that full rate won’t be seen. Therefore, I have set a clean 40% flat rate for EBITDA reductions, which essentially gives BMN a £35.7m net profit for 2018. Now that profit margin is unlikely to be witnessed because much money is likely to be being piled back into the business during this aggressive growth phase. However, what that also means is that BMN is adding value to the business organically and without the further need to raise significant equity through the market. 2019 For 2019 I feel confident that average prices of $55,000 can be achieved but costs should be slightly reduced as Phase 3 comes on line. However, I will ignore this gain and call it float. So operational costs should remain the same as I believe ZAR 12 is a good average for the foreseeable future. Production for 2019 will see an increase as phase 3 takes affect. My belief is that phase will be completed by quarter 3 2019, meaning a full 3 months minimum can be booked against 2019 figures. That should see 2019 production of circa 4,100 mtv. I expect that 4,000 mtv will be sold, meaning total revenues of $136.8m for 2019. By maintaining all the above previous assumptions, BMN at 59.1% ownership, would achieve £34.6m in net profits. So fairly consistent.

@ Wplfman_Jack the vast majority of that presentation has been discussed here for years, it’s just incredibly reassuring to see it confirmed with such vigor. I have no doubt whatsoever that Mokopone’s production costs will get cheaper as the development plan becomes more clear. Such that it and Vametco will sit very close to each other on that chart. That will give BMN 2 of the worlds cheapest mines, and 2 large scale processors, and an electrolyte plant. That’s quite something when one considers the impact that VRFBs will make in the supply side of Vanadium.

There are so many drivers for the SP over the coming months and the fundamentals supporting the SP are also so strong, that it’s really now mainly about staying focused and not allowing oneself to forget just what one has here. As things stand, this will comfortably hit 50p this year, and £1 next. It’s inevitable. Crazy numbers for where we have come from but fair given what we have. The level and depth of the pending news flow is ridiculously when considered in the context of the pricing environment we are witnessing. A sensational share to have caught the bottom on, it really is.