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Apologies, I was a tad lazy there. A re-run.

Everyone has their threshold and their own persona timeframes which I certainly have no right questioning.

From a purely personal point of view, I think we're are still several years away from any potential takeover of BMN, if indeed it were to come.

My current belief is that whatever entity comes out of this JDCA it will look to tie up vanadium off-takes in some shape or form, much along the same lines that large auto companies do deals with the likes of CATL and Ganfeng.

That I believe is what BMN will also ultimately wish to achieve as it would give them the security to continue to expand into their vast resources.

A big entity like Siemens will surely seek such security given the risks associated with mineral supply which are amplified in the vanadium sector. The Chinese are always a risk at any point in time and at any level. Be it competition or as the aggressor. Just look at what Ganfeng just did over at BCN.

However, in my experience, they tend to do their best work from the inside.

The whole VFB/energy storage sector is now very much alive and so things can change very quickly indeed, meaning opinions can change but I believe that is ultimately where BMN want to/should be heading because that's what they have been indicating for some time now. They just haven't had the scale or big enough players to achieve it. They perhaps do now.

BMN website once more,

"Low-cost primary producers with significant production capacity are well positioned to address price volatility by potentially providing long-term, stable pricing."

@jimbo66

The deal announced by IES today is in my opinion the culmination of a process that BMN started back in 2019 and that always had an SGRE sitting at the end of it.

What Redt/Avalon and BMN have done is put together a package that can pass Siemens due diligence and persuade them that VFBs are viable at a grid-scale level that works for SGRE. A company with a pipeline of 10GW of work.

This deal doesn't get done unless the due diligence on the vanadium supply is also there. SGRE wouldn't be committing to such a JV unless clear enough markers on future vanadium supply at prices that do not undermine their tendering processes, can be achieved.

That doesn't happen without BMN on board.

The connections you describe are what we know today because that's what we've been told so far. Just like when we were told that the initial IES supportive investment was,

"Demonstrating upstream support from the vanadium industry for the development of the VRFB sector and encouraging additional investment into the combined company."

When in reality it was all part of a greater package that was designed to deliver one of the biggest project development fishes in renewable energy waters.

I don't believe that IES tech and ambition alone could have landed this deal because they are still a baby swimming in lithium infested waters. They needed the backing of BMN and their massive vanadium resources and the demonstration that significant expansion was happening there. That's what the Orion monies brought and have guaranteed.

FM sells us the notion that we have to be brave and expand now in order to meet the potential pending demand that can arrive much quicker than the production can expand. The reality is he knew this deal was being progressed and that its success needed BMN to act. So the move perhaps wasn't so brave after all.

There are clear milestones to achieve and it won't happen overnight but this deal is potentially massive for both IES and BMN and we have to start somewhere. One of the biggest RE developers in the world is about as good a start as it gets because they just answered the biggest question of all.

Scaled production large enough to go get those +10MW-100MW and beyond projects.

Massive day in the world of IES, BMN and the vanadium industry as a whole.

@Sanchez599

I certainly do not sit in the "oh well it's BMN and they can't do both" camp. My comments were not designed to dismiss concerns over PR or how the company presents itself.

If I could have both I would gladly take them and management should be encouraged where possible to deliver on this front. However, if I have to make a choice then clearly I would take substance over PR and that is where BMN is at right now.

Does the lack of PR drive me to want to give up on the opportunity that is clearly being presented here? No, because even without it the substance is there.

This company is fully funded to deliver 6,800 mtV to a market that is clearly beginning to accept the role of VRFBs in the energy storage sector. The energy storage sector is clearly heavily supported by an energy transition that cannot now turn back. Meaning it's very likely that BMN's initial 6,800 mtV planned output will find consistent and well-priced demand.

That will happen whether BMN advertises it or not. Furthermore, the energy transition itself coupled with the efforts of energy storage/VRFB industry participants will very likely do all the PR work for them. That interest and attention are now just gathering pace. At some point, VRFB players will be included and then everything else should then take care of itself.

It's important not to forget that BMN attracted the support of Orion. Yes the price could have been higher and PR may have helped that cause but then the effects of the Covid pandemic would likely have snuffed such endeavour out. That's because many weren't sure what the future held back in September 2020 and yet Orion committed to this business at that time. Orion doesn't invest in just any mining business. They are particular.

Despite all of that I would really like to see BMN present its updates more clearly and more staggered. What I am saying is that despite this failing the investment case remains very strong and the key fundamentals unaffected.

When sentiment turns and the market takes up the BMN story properly again, it will have a far different beast on its hands and it will be because of the substance that was created in the testing interim and not any PR that sells a business that isn't built yet.

My view only and I fully respect that of yours and anybody else invested here.

1/2
Well, there is a lot of opinions spliced into what I just wrote also.

I completely understand the frustration from shareholders who have watched the value of their investment consistently fall these last few years. It is why I try to tread as carefully as I can when presenting facts and my interpretation of them.

However, I also believe that BMN is in a far stronger position than many are prepared to accept right now because sentiment is undermining the general through the process. This is playing out right now through the perceptions of the progress being made by Largo in their clean energy arm. To be clear, its not a competition and nobody is getting a jump on anyone.

These guys all work closely together and I have little doubt that there will be a link back to the work of MN and BMN at Vanitec which has helped form this strategic move by Largo. When the SP is deflated it is easy to forget such details but MN is the chair of the Vanitec Energy Storage committee. He and this company are forefathers to the whole VRFB industry having started on this path many years ago. They have single-handedly resurrected 3 VRFB companies and delivered all their business to their door. That business requires time to come through but it is on the way.

For those that dig deep enough, it is clear that BMN's tie-up with the IDC in 2016 delivered the Eskom BESS project to the market. BMN management drove that and investors should be asking themselves on what grounds the IDC was convinced to part on the largest electrolyte plant outside of China?

The hardest part was getting them set up with the capital, the structure and a manufacturing capability that has the ability to expand into the opportunities they are now carving out. Again, this all takes time and Largo for all their headline-making words must walk the same path. There is no quick fix. Just look at Rongke Power and their 300MWh facility which should by now be 3GWh and they are the biggest player out there.

As an example, take Invinity. Through their Oxford hub project which I believe is due to come online at the end of H1 2021
and their work with the California Energy Commission, they have landed core partners who once they see the benefits of the systems they have inaugurated, can and I think will scale up their business with the company. With Pivot Power at Oxford, there is a strong chance that the vanadium rental product finds an expanding home. However, if nothing else the rental product beds in.

We are yet to hear about Enerox but we know they are the supplier to Portliner and will highly likely be the local VRFB assembly partner, feeding into opportunities presented by the Vametco mini grid. All of which will be fed by BMN because of the work they spent these last few years cultivating but that takes time to develop.

I applaud Largo's drive and the simplicity of their sales pitch but I take their headlines with a pinch of salt.

To be clear, I really do hope that they push hard and succeed as quickly as possible because it can only help expand the understanding of VRFBs and improve demand for vanadium.

However, VionX Energy look s to have succeeded about as much as Redt or Avalon did prior to their merger. Their IP could well be strong but their contract wins and portfolio just isn't there right now. So first and foremost just like Invinity they have to win smaller projects and demonstrate their capabilities. Yes the VRFB landscape is changing but even so, companies with limited experience and roll out remain a risk for clients.

So whilst the headline figure states a very sexy "annual manufacturing capacity of 1.4 GWh" the journey to achieving such built out capacity (because the first facility clearly won't be that large because it would only add to production costs) is for me unfortunately still a long way off.

Largo may well be able to throw more cash at their enterprise but I really don't see it being any more intensive than what Enerox have just achieved. Plus cash can only go so far. They need the staff, the expertise, the organizational structure etc mand most of all the contracts pipeline.

That all takes time to bring together and will likely follow the exact same path that Invinity and Enerox are now on.

The market isn't stupid. These headlines will of course receive initial excitement but it will quickly fade until such time that the headlines are replaced by something of substance.

There has been much talk about Largo's share price being unjustifiably higher than BMN which to a certain extent is true. However, they are considerably more profitable at current prices than BMN and have a large cash pile and no debt. They also have a far more favourable exchange rate which has not returned to its pre-Covid levels as the Rand has. This is driven in part by their Covid situation and has a significant impact on profitability.

Do I think the gap is fair? No, I do not but then BMN is on a different journey right now. Largo has a relatively new plant with limited expansion programmes that don't cost too much and don't affect ongoing production.

BMN is in the middle of a significant capacity expansion that will soon start to deliver them the same cost benefits and has yet to report on progress. As the market grows in confidence about its expansion and the timelines involved, then some of that valuation gap will start to be filled in. Also, the exchange rate can't have it both ways. A weakening dollar shouldn't just bring higher local costs. Eventually, it should deliver higher commodity prices in the things that are dollar-denominated such as vanadium.

1/2
Hi LionelGreen,

I assure you I am not FM and if I was then investors should be disappointed by how much time I was spending on discussing the company rather than building it.

I appreciate greatly all the positive feedback. BMN is a passion of mine which I share gladly.

When it comes to share price manipulation, whilst I recognise it exists in the markets and shouldn't be too easily dismissed, I cannot make it a central focus to my approach.

My focus is on analysing and monitoring the key fundamentals to establish whether a substantial additional value exists.

So long as a company does not need to raise further funds, the current share price has no real bearing on proceedings.

So long as the company in question is delivering on its goals and I can see clearly that further bigger goals are attainable, then the current price as frustrating as it is does not truly matter. I recognise that for some investors time is an issue. Everyone has their own individual pressures. I can only talk from my own experience and how my plans feed into an investment like BMN.

Whatever BMN do or do not PR wise, the green transition is real and it's changing peoples perspective on how they invest and what they invest in. Energy storage is therefore a far more realistic proposition than it was even 5 years ago when BMN/BE started their integrated energy storage journey.

The one-piece that is still missing is the belief that VRFBs have a significant role to play in that industry. By securing significant ownership in and contracts with VRFB companies, BMN is gradually delivering a world that independently sits and can operate within that whole industry space. At some point that changing and evolving market place is going to begin to sweep up the VRFB element of this whole green transition story. When it does then BMN will likely be the most attractive member within it. That's certainly my belief anyway.

How long it takes to deliver I cannot say but my own timelines allow a great deal of room for it to happen and market understanding is certainly now happening at pace. This is helped greatly by China's approach, by VRFB companies with real futures entering the public markets, and other vanadium plays gaining attention, whether we like them or not.

I am certain that it will happen faster than most appreciate and some will get caught out by it.

The world's focus has only just come to rest heavily on EV technology and their transformation of the car industry. Energy storage is running parallel to that but EV success + the fear being generated by global warming, will in my view accelerate energy storage industry understanding, such that the same time frames to full market acceptance won't apply.

A strike is a strike, no more no less.

Until it is resolved nobody can say what the true impact is or what BMN can or won't recover. Production this year is heavily weighted towards H2. The strike is taking place in H1 so the impact should be lower than the 2018 strike if brought to an efficient conclusion.

The previous strike lasted 16 days and by my calcs cost c. 200 mtV.

Vanchem production and refurbishment continues and is 100% owned as opposed to Vametco at 74%.

With 2 plants the company potentially has far more options than it did in 2018 when Vanchem was not owned and they simply had to wear the consequence of the strike.

Example.
Once kiln 3 is online, kiln 1 is due to go into a period of maintenance/refurbishment. This strike may lead the company to delay such action if it means stronger production. It will depend on things like available inventory and the vanadium price. Increased production at Vanchem means 100% weighted profits as opposed to 74% from Vametco.

Purely an example of what 2 plants give in terms of options. A situation that will continue to improve once kiln 3 and 1 are fully operational and the plant is running at c. 2,600 mtV.

When everything is said and done, right now it is the vanadium price that is the most important factor in all this right now, followed in my view by the Rand/dollar relationship. It will remain that way until sizeable enough progress can be made on the energy storage business side of things. A move that could come any day now as new vanadium rental contracts come through (see my weekend tweet on this).

Back to the vanadium price.

Upon announcement of the strike on 7th Sept 2018, the share price lost c. 15% over the next 5 days or so. However, by the time we reached the day before the end of the strike (20th Sept 2018), the share price was sitting 16.6% higher than it was the day before the strike was announced, even though nobody yet knew when it would be resolved. The reason for this being a sizeable rise in vanadium prices over the same period of time.

The vanadium price isn't currently surging like it was in late 2018 but it is in an uptrend and if it continues, then any effects from this strike action will be nullified.

Furthermore, a hold at c. $36 per kg vanadium and follow-through on production at a revised c. 4,000 mtV (assuming this strike action removes 200 mtV, which isn't a given, for reasons just explained), still points to a significant disconnect on valuation even at 2021 one-off increased production cost rates.

In all honesty, the fall of the rand from ZAR 16 to ZAR 14.30, will potentially have more impact on BMN's fortunes in 2021 than this strike could ever have, but it doesn't come with the same drama, which some crave more than others.

Thank you knutsfordnotary.

In times of poor sentiment when the share price appears to only want to go in a more negative direction, it's very easy to get swept up into that thinking, particularly as many market contributors are happy to simply ride along with whatever sentiment is in play at the time.

In late 2015, if someone had told BMN shareholders that within 5 years they would ;

1. Own not only Vametco but also Vanchem,
2. Hold Mining Right at Mokopone
3. Not only own stakes in not one but two expanding VRFB companies but also have a guaranteed V supply into them,

they would likely have been laughed off the BB.

Securing those 2 facilities and finance to refurbish them, gives BMN all the weapons they need to go on and deliver on their biggest goals. Those facilities and that money give BMN so many options right across the board but as I explained earlier, they can deliver great success from these levels just as vanadium miner, feeding into an expanding VRFB demand.

Their biggest threat in my view is the world economy but even that has the ability to be tempered by an expanding VRFB demand that is real and truly not that far away from countering any temporary setbacks in steel demand.

In the Enerox deal alone, BMN could soon be looking at an investment that is worth between c. 25% and 50% of its current MC, when compared to the fortunes of Invinity.

Currently, Invinity is valued at £125m with c. 19MWh in contracts and a c. 55MWh manufacturing capacity and I consider that to be a subdued valuation based on BMN selling down/news flow.

Based on project wins, Enerox was already two thirds the size of Invinity by the end of 2020. At 30MW production capacity in 2022, Enerox would be c. 3 times the size of Invinity in terms of manufacturing capacity. BMN own 25.25%.

It also abundantly clear that Enerox will be the partner of choice in South Africa and the planned "180MWh of battery energy storage systems" required for BMN facilities, are clearly going their way. Yes they will take time to deliver and the S.A. authorities can be slow to authorise such projects, but those projects are coming. More value.

Throw in Eskom contracts, new and bigger projects through Invinity, electrolyte sales, external demand through other VRFB companies particularly in China etc. All fed by an expanding Vametco and Vanchem and helping guarantee the company, solid profitable vanadium sales.

As far as I am concerned, we are past the point of questioning whether VRFB demand takes off. It's now purely about when. That alone should be getting shareholders in this company excited. BMN has so many avenues to follow on this and a big resource to expand into it all.

Yes, it's taking longer than expected. Yes, the market doesn't get it yet, but all that really matters is that I get it and it is going to happen. Everyone else can play catch up whenever they are ready.

2/2
By that I mean it makes the result all the more achievable with the risk being to the upside and not down.

The ZAR/$ is also key and can play a significant part in the profitability story. my assumption on all of the above figures is for the YTD ZAR 14.90 to hold. If it strengthens against the dollar then profitability reduces. If it weakens then the opposite is applicable.

Profits are calculated on a $35 per kg average sales price. A $5 swing in prices adjusts profitability by c. $29m.

Finally, the path to said $65m pre-tax profits is fully funded, so it's not about profitability being required to achieve it. However, my own view is that this year needs to bring at least minimal profitability, in order to ensure that the expansion to 6,800 mtV can continue. Right now, as far as my calculations show, the combined operations are achieving that.

To be clear these are my calculations only. There's a lot of data behind them but to present that here would just confuse us all and wouldn't help anyone.

On the mining side, this year remains about front end pain in order to realise a stronger more assured future, which given the rise of VRFBs and their potential to protect/strengthen the vanadium price, is in my opinion much more secure than many are prepared to trust.

At any point in time, the energy side of the business can deliver.
At any point in time, the market will begin to appreciate the efforts on the ground in the mining business and give it more credit for it.
At any point in time, the market will begin to appreciate that VRFBs are real and will start to look around for the supplies that are going to feed into them.

Finally, strong profitability looks good to come through in 2022, which opens up new avenues for BMN. It is also the year that the electrolyte plant comes online, which means those mining profits really are a minimum standard because there's clearly stronger returns to be had through enhancing the products of both Vametco/Vanchem.

Right now it's perhaps painful to watch for some shareholders but once BMN starts to demonstrate it is moving towards its goals, then sentiment towards them will change.

$35 vanadium is being achieved right now. More may be about to come but whats important is that $35 vanadium looks like a good long term minimum standard and as BMN expands as purely a miner, they can be very profitable at that level, with everything else treated as a complete bonus on top.

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