Member Info for Daisan

Tyfoon,

Thanks. I did glance at that but it comes across as an opinion rather than a verifiable fact. That said, Roskill's opinions are to be respected. The proof of the pudding is always in the eating and, in this case, the proof of enforcement will be a stronger Vanadium market.

There will be some form of price agreement but I suspect that there is no cap or floor and we have seen no evidence in the quarterlies to suggest this. It is more likely a simple discount to spot so we will impacted both on the way up and on the way down.

The Vanadium price activity of the last few months, particularly after the CNY, has certainly taken me by surprise. I fully expected, based on the mood music coming out of China, that the rebar standards would start to be enforced rigorously. Whilst I don't know that this isn't the case, there should have been a significant strengthening of the market should it have happened which anecdotally suggests that it hasn't. The other implication is that there was very strong stockpiling before Christmas and this is still being unwound (and somebody must be making a fair old loss on this material). Again, I find it surprising that such a situation was possible given the supply constraints even with sharply higher prices.

You can only hope that the market will begin to clarify in the coming months but a couple of things are for sure. Firstly, V2O5 prices are getting towards the sweet spot for VRFB projects in China to kick in which would take thousands of tonnes out of the market. Secondly, stronger enforcement of the rebar standards in such an environment with very little in the way of stockpiles remaining would cause another price spike.

The reason for the interest is that a dividend policy opens up the company to a range of new investors/investing companies who are seeking income. In addition, there are precedents on the market where a share price has responded very favourably to such an announcement.

You need to base it on full year figures which haven't yet been audited. The clue to your calculation is the word 'interim'

I thought that it was a terrible deal at the time and the period since has not changed my mind! It is still a terrible deal. I understand the rationale but the terms were shocking.

It is a dividend policy rather than a dividend announcement.

Your figures are for revenue rather than earnings. A PE ratio can only be applied to earnings after tax.

Interesting. The electrolyte production facility is not operational yet although samples have been sent out for testing as I recall. The scale of the solar/VRFB implementation at Vametco would be useful to know as would the timescale for implementation.

We may not know the margin but history suggests tailings processing operations experience lower costs simply because you don't have to dig it out of the ground. The biggest question mark is probably around the Vanadium circuit as this is less common than zinc/lead. Even so, I would expect the margins to be pretty good once the operation is up to full speed.

I certainly don't think PR is anywhere near the problem that it once was. Both FM and MN make regular appearances at events and presentations are regularly updated as a result. This is far better than it used to be.

The drift in the share price is largely due to prolonged profit taking in the absence of positive news. We all know that there are plenty of price drivers potentially on offer but the company has to deliver on the underlying business operations to produce them. Number one priority is getting the production profile at or close to where it should be and we are yet to have a report of progress on this - the first opportunity is likely to be the Q1 Vametco report.

It is difficult to argue against the company having hit a couple of 'own goals' recently. The absence of a BE Q4 report is an obvious one and provides a news vacuum which can be filled by speculating that progress on the Eskom VRFB did not meet expectations. Delivery of the dividend policy in H2 was also disappointing but it would be more so should this not be delivered by the end of Q1 as there have been commitments on record to do so.

Add these aspects to the weakness in the Vanadium price since the start of the year and it is easy to see how short term drivers have contrived to encourage investors who are very much in the money to take profits.

To balance the above I would say that Vanadium price weakness is only comparative - it is still significantly higher than it was 2-3 years ago. BMN is still exceptionally profitable at the current price and even the lower than anticipated production rate. In addition, the company is putting in place actions to address the production shortfall and I would suggest that they have enough credit in the bank to give them a couple of quarters to see this coming through before suffering too much from our opprobrium.

In the longer term the same price drivers remain to give us reason for optimism. There is plenty to suggest that Vanadium demand will remain robust over the next decade whilst supply is likely to remain subdued (lest it be forgotten that a Vanadium price drop is likely to delay investment into new supply). The need for energy storage will provide, at the very least, an expectation of a large market for BE to go after.

So, whilst it would appear that the price drivers in the recent past have been negative, in the longer term there is still reasons for optimism.

That comes across as somewhat ironic - a company using renewables to mine and consume fossil fuels creates a rather bizarre and confused message to the market.

It will be interesting to see what delayed trades come out of the woodwork. There were quite a few shares available after the spike and the price drifted down but the number reduced significantly towards the end of trade even while the price continued to drift down.

The news needs to be followed up with confirmation that the rest of the funding has been secured to progress significantly higher. Look out for the stale bulls though as there will be many!

Because in a market there are always buyers and sellers. At points in time one dominates the other. On AIM periods of no news tend to result in share drifts as holders get bored or convince themselves that there is something bad happening or something good happening elsewhere. BMN is certainly not immune to this.

It will take some volume to see this rise as I suspect that there will inevitably be people who have been stuck here for some time who will sell into any uptick. Still, today's news was positive and if they close the remainder of the required financing it should be received very well by the market.

It's been in auction for some time now!

With my rose tinted spectacles on, this could be an extremely significant move. Gain the rest of the financing and this should rise comfortably from here given the current low market capitalisation compared to the asset. Let's hope that this picks up in the near future.

Whether they can't get enough Vanadium or whether it is too expensive pretty much comes down to the same thing - scarcity of supply. It is difficult to see how the current levels of Vanadium production can support both a steady demand from steel and a strongly rising demand from VRFBs. Increasing the supply (e.g. from Bushveld) in the short term is likely to ease the issue but not resolve it. That would only be achieved through the development of a significant new supply. It is a bit chicken and egg at the moment - the new suppliers will only come on board when the markets decide that the demand and price will be robust enough to support it whilst the full VRFB demand is only likely to come through when supply is robust enough to support. Meanwhile the price environment will remain pretty volatile as the market seeks to adjust.

I think that the price activity suggests both that there was stockpiling in the second half of last year and that the anticipated demand from the new rebar regulations in China has not materialised. I confess that I was expecting that the regulations would be enforced this time around but it would appear that this is not the case, at least not yet.

Actually, the dollar does not have to be weak for gold to move above $1400/oz. Some of gold's strongest moves have occurred during periods of dollar strength. Yes, there is a correlation but it is far from foolproof.

This price activity has occurred virtually every day for several weeks now (bar the odd day) so it should come as no surprise really.