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The beauty of this is that any VRFB manufacturer outside of China, if they want to succeed, has to secure supply and cost stability.

Right now the best option to do that is Bushveld Minerals. I have said it many times before, the relatiosnhips being struck by BMN in the sector, are on their terms. In 2016 when BMN had not assets or a platform, the tie up with UET was all about then success of convincing a VRFB OEM to work with them.

That's now history. The drive higher in vanadium prices has not only delivered BMN the tools to advance their platform and streamline their operation (just in time I might add9, but it has now handed the best technical VRFB companies and their project pipelines too.

For all the vanadium price rally gave BMN; it took the same away from those OEMs. So they are needy and desperate and open for business.

Hence why BMN gets a 20% commission on its loan to Redt, which transfer into shares. That's $1m of free investment in what could go on to be a significant VRFB concern.

The set up is wonderful it really is and it is made all the more interesting because the World Bank has stepped in with an unprecedented $1 billion in investment, to drive $5 billion across the private sector, that being in essence state utilities.

None of whom are cycle led or overly burdened by a downturn in the markets.

Note this from the February 2020 presentation (slide 9) ;

"Preparing for the 2,000 MW energy storage allocation in South Africa’s 2019 Integrated Resource Plan, and other African projects within the World Bank’s 17.5 GWh energy storage roll-out programme"

Note "the other African projects within the World Bank 17.5 GWh energy storage roll-out programme."

I talked earlier about how well BMN have connected themselves with this new industry and business driver.

Mikhail Nikomarov is the chair of the SAESA. The SAESA is one of 29 organisations that form the World Bank led Energy Storage Partnership (ESP). That being the very ESP whose stakeholder consultation meeting, BMN presented at on 21st January 2020.

The above quote from BMN is presented under "Deployment" and is specifically stating that BE is preparing, meaning something is coming and the company vying for that work, has a man on the inside.

World Bank ;

"The ESP will complement the WBG’s $1 billion battery storage investment program announced in September 2018 to significantly scale up support to battery storage projects and raise an additional $1 billion in concessional finance."

The $1-5 billion of funding doesn't just exist for BMN. They are sat at the table that is developing the methods to unlock it, to make it a reality.

These sorts of developments should be major signals if the market were even paying attention.

https://www.worldbank.org/en/news/press-release/2019/05/28/new-international-partnership-established-to-increase-the-use-of-energy-storage-in-developing-countries

So when does this all start to happen?

I have talked many times before here about the trigger point. That being the moment when the market finally gets it.

What I mean by that is the point at which it becomes clear that BMN is not a miner but an fully integrated energy storage play that can generate revenues streams against the cycle. A very important ingredient because it is at that point that investors can see that BMN has a choice and can exploit whichever market is most beneficial at any given moment in time.

Be it steel when the cycle is up or VRFBs when it is down, though clearly it will not be so simple in reality.

That is why the RedT announcement on Monday was so significant. It demonstrates that a expansion of the rental product in the real world, with now 2 VRFB partners operating with it. It is a matter of time before Enerox goes the same route.

That will mean that 3 of the leading VRFB companies in the world, with significant project pipelines that to this point, have struggled due to a lack of product and noncompetitive pricing, will have the means to demonstrate to their potential customers, a way of getting their projects built for far less upfront cost. A considerable development as the world potentially starts to run short on finance.

One 2MW project does not act as the trigger but the snowball is certainly now in motion.

The more projects in play, the more the concept becomes proven, the more confidence grows in the market.

At some point the market will realise that there is no turning back and then the predictions for VRFB market share etc will begin to be factored in. That's when the trigger point will come and it may just end up being driven harder because the events are taking placed during the lower end of the cycle.

Of course it will also be affected by the size of the projects and their ability to excite the market, which is why the Eskom BESS project is so significant. However, ultimately it will be about repeat business and a demonstration of longevity. It is that which will excite the bigger investors, which is ultimately what BMN needs in this volatile investment world.

Now imagine for one second that VRFB aren't reasonably successful but actually as successful as the predictions state with 50,000mtV of new vanadium demand created.

Imagine the lithium like scramble as miners that could not achieve finance to get their material out of the ground, get busy trying to do just that.

The reality is that well before they even get started. Well before the triggers kick in to allow them that thought, that opportunity, BMN will growing into that market.

If BMN have to hod at 4,500mtV until the market picks up then that's a shame but if it does pick up, then with minimum 3 VRFB company investments, guaranteed supply agreements and a place on the BOD, who is going to know that the extra supply chain inputs are needed first?

Who will have the least resistant path to expansion out there, the more spare built capacity?

Who will be able to realise finance first to expand into it? Who ultimately holds all the cards because of the efforts they are putting in now, to get it off the ground?

To be a part of it investors have to believe that the market is there that the concept is achievable. I do.

Investors have to appreciate that now is not about dividends or quick fixes for the SP or even how much the company is currently valued at. Now is about ensuring that the plan stays its course and that BMN is positioned correctly for when it all kicks off.

There has to be patience and things may ultimately take longer than liked but the key point in all of this, is that we are not talking about a miner who is predicting a market that is somewhere out in the stratosphere, owned by others outside of their control.

BMN is the controller of their own destiny. They are taking the lead. The VRFB market that the statisticians write their yearly reports about is the one that BMN is working towards creating. That's what a fully integrated vanadium platform is all about.

I believe in this management team and their ability to land this and land it well. They are proven deal makers through Vametco and Lemur. They have form and have positioned themselves in all the right places to give themselves the very best chance, be it Vanitec, the S.A. Energy Storage Committee or the IDC and Eskom itself.

So that level of success is very much on, it is in their hands and if it comes to pass, then the most connected owner of the largest high grade vanadium resources in the world, is going to do very well indeed.

Rant over.

The rant continues. .

I am going to say it again. The ultimate success of VRFBs outside of China, is going to be centred around the efforts that we are seeing from BMN today.

That is why right now this is all about cash flows and the ability to maintain the plans to support the VRFB sector and create the supply chains that feed into it.

I do not see a problem right now on that front. At 4,500mtV by close of play 2020, they are well set up for the first phase.

Now I have said this many times here but i will say it again.

BMN do not need the VRFB sector to be successful in order to make a lot of money from the supply chain. They only need the part they have chosen to be involved in to work, in order for that success to be realised. That said they are backing 3 of the biggest players there are and clearly pipe lining more.

That battery energy storage roll outs in significant quantities will happen and are here to stay, is a given. So the market is there. Is so. The question mark is now can VRFB gain market share?

The VRFB is the best product on the market for a good number of long duration solutions. Fact. Long duration batteries are expected to be the lion shares of new projects moving through the 2020s.

The VRFB is cost competitive with lithium already, when the lifecycle cost is fully considered, as is the bequest of Eskom for their BESS system in their tender. Lovely.

The introduction of guaranteed supply and guaranteed pricing of vanadium feed, pushes the pendulum even further in VRFB's direction. The introduction of a partnered system where by the vanadium company benefits as part of the consortium, leads to a better relationship and a willingness to bend in order to succeed. WIN/WIN. Lovely.

It is believed that the last ingredient in all of this is educating the lithium intoxicated customer base that VRFBs are a worthy replacement.

Fire hazards in lithium-ion batteries have already helped start that ball rolling.

Delivering projects like the Oxford hub battery will go a long way to help further. However, that thought process is a fallacy because the interest was always there, it is the ability to obtain materials and supply at the right price that has hindered them.

From the BMN REdt RNS dated 1st Nov 2019 ;

"Real, near-term deployment opportunities with major buyers that offer robust follow-on sales opportunities."

"A burgeoning project pipeline that will allow the merged entity to achieve the economies of scale essential for cost-competitiveness quicker; to increase investor confidence; and to raise the bankability of its products and projects."

So the reality is there are enough customers out there already and through its VIP, BMN is gaining access to them and the value chain that comes with them.

So whats missing? Truth is nothing and that's ultimately my point.

Unless you are a trader, of which I am sure there are many present (good morning), the actual share price right now does not matter. Yes I know it is so easy to say and so much harder to tolerate.

However, right now BMN do not need a capital raise. Not even to own 20% in a yet to prove itself Redt restart.

All that really matters now is seeing an end to the coronavirus and clear signs that the Chinese production engine is getting back up to full speed and staying there.

Those two factors will drive a great may stocks in the coming weeks. What will not happen is that a magic wand will unfortunately not be shook and all of this will go away. The sooner investors get used to the situation the better they will likely feel, as we all begin to place what is happening now in the context of the bigger longer term picture.

Note the following article regarding CRU Group thoughts on the vanadium market now in 2020.

“Looking at a historical price chart will give any financier or investor pause in putting money behind a vanadium project,”

When vanadium prices cratered in 2015, many convinced themselves they weren't going to ever come back. The same panic driven herd mentality is helping drive the markets now and vanadium isn't actually doing all that bad at the moment.

Whatever it does in the coming months, it isn't going away. Infact with VRFBs contributing even a small percentage, it is only going to see its markets strengthened.

New mines aren't going to get financed in such a volatile pricing environment.

The biggest thing BMN ever achieved was getting into production without the need for debt. That is going to pay significant dividends as the world goes through more difficult times. When we come out of the other side, their position and their ability to expand into any growth, is going to make for a very powerful story.

That's even without knowing that it is BMN that is pioneering VRFB development and the models in which it can see the most success.

I read comments here about BMN needing VRFBs to somehow save their business model, their future. The reality is that BMN are the biggest driver of VRFBs in the whole damn world. It is they that are creating the rental models. It is they that are supporting the top VRFB companies, when no one else will. It is they that are prepared to sacrifice profit front end, to reap the rewards of market share later down the line.

So if VRFBs are successful, then outside China at least, BMN will be ultimately responsible.

If so then BMN will benefit the most and will hold a remarkably strong position in both the supply chain that feeds them but also the companies that produce them at a time when new vanadium will still be struggling to get out of the ground.

Hard to appreciate in weeks like this but that's where I am.

https://investingnews.com/daily/resource-investing/battery-metals-investing/vanadium-investing/vanadium-comeback-on-hold-coronavirus/

Yes but understandable very difficult for smaller investors to see right now. Such days are almost once in a lifetime.

We are paying the price for an overstretched stock market (not necessarily AIM), a potential oil price war, a virus with an unknown economic outcome and a US president who wants to blame everyone else and refuses to lead.

Its a toxic combination but like all things in life, it will eventually pass.

2008 crisis saw a 40% drop in FTSE in 12 months.

This current drop is now 28% in just 3 weeks. Its vicious and not many companies aren't being affected by it. But it will pass and good companies with good management and strong balance sheets, will come out of it just fine. My view is that BMN is very much on that list and with their energy storage division, has as good a chance as any other miner out there, to succeed, even in a downturn.

In the meantime, this period has to be lived through and the market has to stabilize.

@ShearClass It is in my opinion not wise to judge miners against the market in general.

Since 19th Feb BMN is down 50%

Evraz in same time period is down 40%
Glencore 38%

Those 2 miners are big in vanadium but are far more diversified than BMN.

So the extra 10% or so is justified, as it stands.

We are witnessing a market wide sell off from the very top of a bubble in stocks, driven by state reactions to a virus, coupled with an oil price war.

One could not ask for a more toxic set of circumstances and yet the desire is to try to find something wrongs with BMN and/or its strategy.

Why does BMN have to be so special right now? Why can't it just be accepted that at times like this, miners get hit and hit hard.

Whats key is can they survive it? My view is yes, so I stand and I wait, as best I can, until we hit the bottom, which at this rate can't be all that far away.

The market is busy trying to price something it doesn't truly understand. That means it will over correct to the downside.

That's life in the markets, be it this is an extraordinary event.

@ShearClass We live in extraordinary times so anything is possible but I take solace from the fact that BMN signed a JV with Redt just 3 days ago.

Now a week is a long time in this market but that deal points towards a solid belief by both BMN and Redt, that at the very least, Redt expects to be in business this year, to fulfill its Oxford contract and more. Otherwise why sign it now? Why not wait until the end of the Month? Its only 3 weeks difference. That's not going to jeopardize that contract in Oxford.

Redt is due to commence trading again on Monday. The funding is due to be closed out by the end of the month.

Yet the belief is that BMN is busy pushing through a placing 4 weeks in advance, at the height of a collapse in its SP, to fund an anticipated investment in a company, that it does not need to make, but could finance through its own funds on hand.

I have heard better.

@james2k66 Thank you but I am not overly worried about my myself, my wife or our 2 young children. As of 1 week ago, no child under the age of 9 has died from this virus.

I do have concerns over older members of the family, especially those with existing respiratory problems.

My point was more centred around the seemingly total lack of organisation that is demonstrating itself across Europe and the US but also that we may end up, when this is all over, realising that we were dealing with a new form of influenza with similar death rates, heightened by the lack of an existing treatment/jab and that is all it is.

That we have to go through a heavy correction in the markets is unfortunately inevitable. It was due and it was going to be corona or some other trigger. Its just a damn shame that we all have to kid ourselves over the severity and likelihood, that it can be contained by shutting down economies and with it the livelihoods of persons who themselves may not recover from this.

Incidentally, life in Stuttgart is normal. All schools (bar the one that had a case) are open. People are working. Shops are well stocked. That may change but the general attitude is its a strong cold and we need to wash our hands and be more careful but life goes on. The markets would have us believe it does not.

Some thoughts.

Right now the world is busy trying to protect its citizens from a coronavirus that is being advertised as having death rates of +3%.

However, the figures being employed only include those that have been tested and confirmed to have the virus.

Australia has 149 confirmed cases of the virus and yet both Tom Hanks and his wife, who are currently on the Gold Coast, have managed to catch the virus.

The same goes for members of congress, who are reported to have caught coronavirus, yet there are only 360 confirmed cases in Washington state and only 1,336 in the whole of the US.

A health minister in the UK has caught it and yet the UK only has 456 cases as of yesterday.

I live in Stuttgart, Germany and personally know people who are connected to 4 of the people who have the coronavirus and yet as a city we have only 13 confirmed cases as of yesterday. What are the odds that I can be aware of 30% of the cases here?

My wife has had flue like symptoms for 2-3 weeks. I myself have been ill for a week or so, both mild. She was at the doctor today for tests for a related matter. The doctor has run blood tests last week for a number of things including mineral deficiencies and a viral infection has been noted to be present in her system. That has led to more tests today for influenza and other known viruses. However, the doctor has not tested her for coronavirus because she has had the flu symptoms for more than 1.5 weeks.

If the current tests come back negative then she will test for coronavirus next week. In the meantime my wife is allowed to go to work and my children to their kindergarten.

A friend of ours who works at the local hospital has had contact with 2 known coronavirus cases. He was told to go home and self isolate for 2 weeks. If he wants a test he has to go to the Health ministry himself and it takes 2 days to get the test. He has had contact with hi ex-wife and child over the weekend and they have not been contacted or isolated.

These are just 2 examples in Germany. I am sure this is repeating itself across Europe and likely the world.

I am no health expert, so I tread carefully but the figures are clearly utter nonsense and a great many people are suffering from cold like symptoms and not acting upon it or are unable to because the system won't allow them too.

What does that say about how far corona virus has truly spread. What does it say about its true potency? Its true death rate.

It is understandable that states wish to protect their citizens the best they can but aren't we all just kidding ourselves. Coronavirus is as far as I can see far more widely spread into communities because the methods employed to stop it simply aren't in place and its mix with the influenza outbreak is confusing people.

So it looks to me like we are busy shutting down our systems on the wrong information. At some point that may just sink in.

@Alfacomp Appreciated and thank you. I was leaning more towards the visible project pipeline, which appears to be far more readily accessible. Avalon projects are harder to establish.

It should be remembered that the exclusivity agreement for vanadium supply is only initially 2 years. So the expectation is that they hit the ground running.

@ShearClass BMN have gone on record many times, that they do not wish to own Redt/Avalon outright. They want to support them and access their vanadium demands exclusively.

If nobody is prepared to invest, then BMN likely goes down the Avalon and Enerox route. However, I am not FM, so I cannot say that my opinion is 100% correct.

With other options available, BMN do not need to push the Redt deal, although it is a nice to have. It was/is an opportunity to take a stake in a much bigger VRFB company, so I do recognise it would be a shame to lose it. Still, its too big for BMN alone, in my opinion.

What is most important to remember is that BMN's $5m commitment to Redt/Avalon, was designed to act as the key to the wider investment door.

BMN have not only provided the funds to get the deal dome, they have committed to supply vanadium to the enlarged group, at competitive prices. The enlarged enterprise post deal, offers investors far more security than that which stood there previously.

Will it be enough to get the raise done? I don't know but BMN's presence should not be underappreciated. They are no minnow anymore.

scotscout Good point.

At 5 months, that would constitute another £950,000, which would be 58m shares on top of the 236.4m.

However, whatever the figures are, the idea that BMN would be raising for this, right now, is for me absurd. The backlash for raising at 10-11p, when they clearly have cash available to cover what is itself, an unnecessary further commitment, would be major.

So its a no from me.

Coronavirus is not under control. The markets are panicing. Its carnage nearly everywhere. Does it need to be anything else more than that right now?

@ColonelDrake That I cannot say. If they fail to relist then BMN's loan converts into Avalon shares. Not ideal but still a solid battery manufacturer, be it in my opinion, not as advanced as Redt.

I see no outcome where BMN pushes to support them beyond the 5-10% that they require to secure their vanadium supply and a place on the BOD.

@JD1972 Appreciated but as we can see, I make mistakes too, so everyone should do their level best to do their own research and always always make time to check the facts for themselves.

If BMN raise again, it will be co-ordinated and for a purpose that is far more beneficial than an extra stake in Redt today and it will be done when the markets are far less volatile.

@ShearClass You are absolutely right, I have missed the Avalon shares and the $5m from BMN does indeed look like its sits outside the $30m working capital raise. My bad.

Avalon $37.5m is right now £28.8m.
BMN $5m is near as damn it £3.85m.
Working capital $30m is circa £23m.

So 3.37 billion new shares + 951m shares in issue = 4.32 billion.

BMN will hold 236.4m, which is 5.47%

If they push to 10% now, then they need a further 195m shares, which is £3.2m.

So calculations wise we are very close and I thank you for steering me correctly.

However, as I stated earlier today, BMN has access to around $44m in cash, even after the Vanchem deal, the Redt loan, the Enerox deal at 50% and the Yellow Dragon $3m pay off.

And that is without taking into consideration profits made in H2, which were achieved, be it at a reduced level.

So even if BMN thought it wise to up their stake now to 10%, even though they have a year before they would need to, to retain their place on the BOD, they would 'only' need to spend around 10% of the available cash to achieve it.

In such a position, why on earth would BMN instigate a placing to pay for something that is not critical to the business today, at the exact moment when the markets implode, such that they have to raise at a 50% plus discount?

Whatever the numbers from the Redt deal, with all due respect, that does not make any sense at all.

And the 20% argument makes even less business sense.

For clarity.

I noted that and remarkably enough, i did some numbers on the Redt deal some time ago.

It should not be forgotten that upon achievement of finance, BMN's $5m (£3.9m) loan to Redt, will convert into Redt shares.

Redt currently has 951m shares in issue.
BMN would receive around 236.4m shares for their loan at 1.65p a share.

The proposed further "at least" $30m (dollars) was total and BMN's loan of $5m was part of it. So the remaining circa £20m raise, would generate 1.212 billion new shares.

That brings the total to almost exactly 2.4 billion shares.

BMN would then be the holder of a smidgen under 10% of the new Redt company.

The significant number is 5%. That percentage gives BMN their 2 year exclusivity agreement on vaandium supply and a place on the Redt BOD for one year.

To extend their BOD place by another year, they must be at 10%.

Will they go for the 10% at re-admission? Possibly but it would involve a minimal sum to ensure they sat above 10% and avoided being diluted out of their position on the BOD, which is safe for a year at least.

I therefore don't see that being relevant to current BMN price movements.