Member Info for Daisan

As stated below, capex was stated as $12m on the 2013 study for Imaloto. Power station will require greater capex but higher resultant value. We can speculate but we don't have long to wait to find out!

I used to have some shares in BBSN, mainly because I knew one of the old directors. Sold out with a small gain before they plunged. I looked at the RNS this morning and thought that was pretty positive. Checked the price which was up 25% so I decided to leave it to cool down a bit. Completely forgot about it until now when I looked. Up 370%! I think I might give it a miss. It may go up another 100% tomorrow. But it may go down 50%. A gambling share.

Well, the prices I gave were for sales achieved in the last couple of months for producing assets, so the production being achieved at Imaloto was a given to achieve those prices. But market comparison is by far the best way of valuing an asset. A couple of caveats on this - the producers were, I believe, for coking coal (which has a higher value); they were based in a better jurisdiction; they were larger resources. All of which would command a higher price. I would reiterate that I don't quite understand the NPV on the valuation study for Imaloto. It implies opex of over $70/tonne. However, if we say opex is $71 (which seems very high) then the margins are currently double the study and the NPV is similarly double. The payback is actually pretty short for a capex of $12m and the IRR should be pretty good. But the current project is talking about power generation which is a different ball game. Much higher value but with a much higher capex. As I said, we don't have long to wait for the FS which will reveal all but I would expect an NPV considerably north of $36m given that the project and pricing environment have changed considerably.

Well, we won't have long to wait for the FS on Imaloto and that should give us projected cash flows and, hence, an NPV for the project which is probably the most accurate maximum figure we will get. Before financing I would expect a takeout of the asset of no more than 20% of this. With respect to the mines mentioned (Kestrel and Hail Creek), the sale of these mines achieved about $20/tonne of reserves but as far as I can see this was coking coal rather than thermal coal (although it may be a mixture - hard to tell from the websites). Coking coal has a value approximately twice thermal coal I believe. From what I can tell from the Bushveld website, Imaloto probably has a reserve of about 30m tonnes (with a resource of about 130m tonnes). If we project $10/tonne of reserves then you are looking at a value of $300m. As a base line, it is worth considering the valuation study in 2013 which gave a low NPV of $36m but it is worth remembering that this was based on a coal price of $81/tonne. Having looked at the numbers (producing 1.5MT per year at a price of $80/tonne and with an initial capex of $12m) I can't for the life of me work out how this came to $36m as the cash generation would seem to support a much higher value unless the opex is much higher than I would expect (i.e. over $70/tonne which seems excessive).

The information provided on Vanadiumprice.com (always prefer a good chart!) has suggested a period of stabilisation. If this is correct in stating that interest is returning on the buy side at this level then the next leg up could take the price to substantially higher levels as the drop would appear to have been a lack of buyers rather than a glut of sellers (we know that the product just isn't there to provide for a glut). I was expecting a drop to more like $50/kg or lower when we topped out at $70+. A base at $63-65/kg would be very bullish as it would not have even reached the last peak.

This is turning out to be quite an interesting day. Considering the size of this transaction and some other buys that are visible (if late and rather difficult to assess sometimes), it is notable that the share price has not responded very strongly. It has to be concluded that there is some very considerable selling going on beyond what we can see currently. It will be interesting to see further delayed trades appearing as and when.

BBN, I agree that these are probably the most important (although it will be difficult to get the project off the ground without finance) but I would not say that they were the most difficult. In fact, considering the rather compelling nature of the offering (i.e. it not only solves a power generation and transmission issue but provides jobs, infrastructure and other economic benefits), I think that the concession was virtually inevitable if subject to the usual government inspired, time consuming process.

I think that there may be some reasonably hefty delayed trades turning up. I am seeing exactly the same price action on ARS currently. Makes me wonder whether PWC's invoices are due!

I actually think that financing is the biggest hurdle but the environmental impact assessment should not be underestimated as well. As I understand, and I confess that this is not first hand information, financing for coal projects is quite problematic currently with the green agenda not playing well. That said, the price of thermal coal has been pretty strong and money tends to talk pretty loudly!

I get the impression that BMN are going down a demerger path rather than an outright sale but it will be interesting to see what happens in the next 12 months. If our partner comes in with a good offer, I would certainly not complain especially if it means funding development of one of our Vanadium assets or purchasing a brownfield location.

Happens on every share I have ever been in when there has been a sharp rise. Any rise will attract sellers and at some point the sellers will outweigh the buyers with the result that the share price falls back. For an AIM share the drops can be sharp and large. At some point, provided the fundamentals remain supportive, the selling begins to dry up and the buying increases, resulting in the price rising again. I wouldn't worry about it. We have seen it several times before and it will pass.

Government approval for the project. Feasibility study remains on course for completion by the end of June 2018.

Not the one I was expecting but nice nevertheless!

A LinkedIn link was provided yesterday to a post about Dalian. Interestingly, the poster is indirectly associated to Vanadium via Multicom Resources which is currently unquoted but appears to be considering an IPO from what I can find out. Multicom is interesting for a couple of reasons apart from the fact that it has a decent resource (its a bit difficult to tell based on information available but it looks like about 1.6 million tonnes of contained Vanadium as far as I can see). Firstly, it is sedimentary based which, they suggest, lends itself to relatively low cost production. Secondly, they are committed to the vertical integration approach with a partnership with StorEn Technologies, providing more validation for what appears to be an emerging standard. Finally, and most interestingly, whilst they are suggesting an initial production rate of 10ktpa (it is not clear whether this is V2O5 or contained Vanadium), they are suggesting the potential for ramping up to 50ktpa should market conditions be supportive. It is this final point that I find most instructive here. Multicom's deposit is not as large as Bushveld's resources but they clearly see the potential to deliver multiples of their planned production rate. On the demand side Fangchenggang is going to consume 250k tonnes of Vanadium - three times the current world production. It is going to take new producers to fulfil this but I genuinely believe that Bushveld will step up and produce multiples of the current rate. It has the resource, it just needs the market (which is coming) and the vision (which FM has proven that he has in spades). It is my expectation that news will drop around the time of the Mokopane mining licence that will pave the way to much higher production levels - considerably higher than anticipated in the PFS.

I tend to agree. The BoDs do not want to succumb to a takeover before the value is fully understood. Beutong is unlikely to be that attractive to a major currently (it is on the cusp), although the current deep drilling programme could well change this. BKM is the most likely target for external participation but this will be at a project level and will likely be a smaller company, probably of local origin. Talk of a takeover is premature I believe. I am certainly not expecting one for at least two years.

Clearly there is a a deal of selling at this point and the 250k trades would suggest that it may well be one significant seller. Once that is cleared I would expect there to be upwards pressure on the share price. Given the many targets, likelihood of consistent news items and large scale potential deposits, this should be viewed as a long term opportunity with all the associated corrections along the way.

Clarkgriswold, I didn't consider daitom's post to be negative, just frustrated. When share prices retrace there is always a sense of frustration created and people tend to vent this frustration through bulletin boards. As most communication is via body language, there is a great tendency to misinterpret the actual and emotional content of a textual post. I tend to find that not responding immediately is usually the best path as otherwise the discussions tend to descend into spats.

Sanchez599, My alter ego tends to filter all that negativity. You should get one!

Not that I am aware of. Let me just ask my alter ego. Seem. Nope.

Alfa, I base my decisions on fundamentals but keep an eye on the technicals. TA looks at the holistic price action rather than individual trades although the daily highs and lows can be influenced by outlier transactions. If you consider Elliott Wave as an example you will see that this looks at the complete picture in terms of price over many timeframes.