Member Info for Daisan

Wolfman_Jack,

South African corporate tax rates are 28% rather than 38%. The calculation for the NPV is not as simple as it would appear owing to the way in which NPV is calculated (DCF).

Actually 3400mtv would be a result as far as I am concerned and it looks like this can largely be achieved through grade control. It has been clear that the plant has struggled to get anywhere near nameplate capacity of even the phase 1 upgrade let alone phase 2 so for the company to achieve 3400mtv without further capital expenditure would be a huge step forwards.

That said, clearly the path to 5000mtv is further into the future than planned and confirms the revised timescales that have been alluded to (which this board interpreted as meaning being brought forwards). Unfortunately this will limit the capability of the company to take advantage of the opportunities that the next 2-3 years will make available as Vanadium demand increases before capacity from further operations comes available.

I suspect that there will be a renewed focus on brownfield operations now as a way in which production can be improved towards target levels but this news from Vametco does not assist that process.

zeusfurla,

PE ratios are based on net profit not on EBITDA. And the EBITDA figure here is based on 100% of Vametco rather than the 74% we own. So to get from the figures provided we need to take off depreciation, royalties, selling, general, & administrative expenses and taxes and then calculate 74% of that number before using that as a basis for calculating PE ratios.

Inner-Harmony,

Whilst true, BMN reporting has showed us that EBITDA is a very good indicator of profitability.

Onefcc,

The 230mtv lost was for the whole year rather than Q4.

Ok. After a skim, let's get the positives out of the way first. This update confirms the profitability of the operation which is extremely high considering the relatively low level of production. Another positive is that they are active in doing something about it. Add to that the fact that costs are well under control despite the low production levels. Very well actually.

So, in terms of generating cash, this update confirms the capability.

Turning to the negative side - production and sales levels! Considering that the Q4 forecast was revised 6 weeks into the quarter, this is terrible. The outcome should have been pretty well signposted then and it would appear that the full year forecast was more hope than likelihood. Sales are lower still at the strongest point in the recent price environment which doubles down on the performance. Ok, this is likely because they needed to build up some stockpiles but to miss that opportunity is sad to say the least.

Now, unlike most operations which would be in bother should they have a production statement like this, BMN is far from it and this quarter was extremely profitable. But they need to get a grip of this production issue if they are going to realise the true potential here.

Personally I think consistent reporting is part of being a professional organisation. I accept that Bushveld are developing in this respect and should be given some leeway but in my experience a professional board will frequently implement reporting changes early in this cycle. There is no reason why resource updates cannot be provided separately (indeed, I would prefer that they were).

The 2018 guidance was poor. I recall at the time questioning whether 3680mtv was achievable given the fact that nameplate capacity was not even due to be achieved until June 2018. This led to speculation that production in H2 would be higher than this capacity and further speculation around phase 3. So a bit of a disaster all round. I agree, let's get it right or should I say 'realistic and achievable'. A low number sends the wrong message but a high number that isn't achieved is arguably worse.

It will be interesting to see who the new guys are. Let's hope that they are not just replacing the RGM/RRR circus with the MTR circus! It would be good to have some people on board who actually act in the shareholders long term interests rather than the director's short term interests (i.e. NOT PJ et al).

Rob1967,

I confess that I am not convinced!

Regular Quarterly reports are an accepted norm for mining companies. The only ones that I know of that don't produce them or occasionally miss them I would class at the dodgier end of the spectrum. As far as I am concerned they should release the quarterly reports as soon as the information that constitutes them is available which should have been some time ago.

It will move eventually. When the company gets to the point where debt is paid off and dividends come in (this had a spectacular effect on AAZ for example) or VAT is repaid then the share price will definitely respond.

The company can only do what it is doing - operating well and generating cash. If the investors do not buy the shares on the back of that performance then that is their problem. You can lead a horse to water but you can't make it drink.

As was indicated in the last conference call, the hedge currently in place can be rolled over rather than used so they can take advantage of the rise in the price of gold, at least to some extent. As such, the rise does improve the economics of the operation.

I would add that the hedge was a prudent move given the fact that they are not receiving their VAT currently and they have some debt to pay off in a short time frame. One of those things where removing the risk was the right thing to do even if it removes some of the upside.

?

I would add that, over the years there has been considerable excitement about news coming up based on a presentation that FM was giving only for no news to be forthcoming so I wouldn't expect any new news based on the timing of the event (although quarterly reports must surely be due before then).

I make it 169,782kg. Have I missed a shipment or are you including the 29th December shipment?

I don't see why we would take this ore when we have decades of reserves at Vametco. There was a suggestion of taking slag from Ironveld which has some merit if the contained Vanadium was at 20% as indicated but this ore would be of a similar grade to that at Vametco already.

It is processing capacity we need rather than access to new sources of ore that aren't our own.

Just adds to my irritation at the use of 'concentrate' rather than 'in magnetite'!

The two worst directors that they could possibly get. Both purely out to line their own pockets. All they need to do is add Jim Williams and they would have the complete set.

Endion, Mastermines view on pricing is tinged with wish fulfilment I believe. He wants the Vanadium price to stay lower to encourage development of VRFBs which is understandable but you shouldn't let this cloud your view of what the likely outcome is based on the facts and the facts all suggest that the Vanadium price is likely to resume its increase this year after the precipitous drop late last year.

Pat48,

The primary role of the Board is to set the strategic direction of the company and to ensure that the interests of the shareholders are upheld. I consider this to be a strength of BMN rather than a weakness. Actually, I would go as far as saying that this is the main strength of BMN.

The implementation of this strategy is via the executive team. It is possible that more executive resource is required but each operating unit has a clearly defined CEO who should be responsible for ensuring that the appropriate resource is available to them.

I don't think that there is an issue operating the business as each unit seems to have a grasp on what they are doing (although I would like Q4 at Vametco to suggest that the improvements are feeding through to production and I would like to see that the BE VRFB was successfully commissioned). The primary issues with the company currently are inconsistent and/or delayed communication of activities and a falling share price! The former is within their control whilst the latter isn't although they can clearly influence the direction of travel.

Indeed. RNSs after close on a Friday are often poor as they try to bury bad news. It never works, of course, and just creates unnecessary angst for shareholders.