Member Info for Daisan

ARCM101,

As regards how long can they continue selling Vanadium at a loss, the answer is dependent upon cash rather than profit. The latest results indicated that they were generating cash so at worst they could cease the capital investment outside of essentials and keep on going.

Mining is a capital intensive business but a significant part of that is at the beginning of a process. As such miners can remain unprofitable for quite some time owing to depreciation/amortisation. That doesn't stop them from operating.

When Vanadium prices were quite a bit lower BMN were not generating FCF which is the point at which you need to be most wary.

It seems to be reasonably useful information. Obviously it is insufficient to work out profitability but it provides a mechanism to estimate production growth or otherwise in a more timely fashion than waiting for the monthly report. Marry that up to prevailing Vanadium price gives a rough understanding of possible revenue growth. All very ballpark but the sort of thing we all like to do on occasion.

I certainly don't see why providing this information is a problem for anyone. If you don't like it just ignore it.

Whilst I agree in the principle of cutting your losers it would seem to me that the time for cutting should have been a while ago! Cutting when the price is down 90% from the peak is a little late.

Share prices are at the mercy of sentiment and it is pretty clear that the sentiment is rock bottom here. The next results may well influence sentiment but the share price would have responded long before if they are good as market participants would be anticipating them.

The Vanadium price is the thing to watch. If that really gets going the share price will undoubtedly respond. Until then I expect the price behaviour to continue - drift down with intermittent sharp rises and falls.

Of course, hindsight suggests that we should have gone for Largo for Vanadium exposure. Then we would have only been down 83% from the 2018 peak.

It's a miner - a profit at the operating level is somewhat better than I anticipated. Cash is the most significant element and they are starting to see FCF from the operations despite Vanchem's slow kiln 3 ramp up. You would hope that, given the ramp up, this should improve further and perhaps we will break even (at a net level) in H2.

Better than I had anticipated (grown used to?) but still some room for improvement.

I have often wondered why tidal hasn't taken off in the UK which is arguably the most likely place in the world to deliver a viable project. I think that the combination of high capital investment compared to other options has stalled its development. However, the current environment may result in a shift in attitudes.

My understanding is that large scale projects in the UK are only likely to provide about 10% of current electricity requirements but I can't help thinking that there must be opportunities for many more smaller projects.

For me large solar projects in the UK are of limited use given the amount of sun we get so I can certainly see the relative attraction there. But wind and nuclear will certainly have a role to play. Nuclear and tidal have the advantage of being predictable of course but energy storage certainly should be part of the mix.

Well, the spread has narrowed but, unfortunately, this has been achieved by lowering the ask.

It tends to be the case on the way up as well. People will take profits thinking this has got to be the top and then it keeps on going. For BMN I recall this being the case for 5p, 6p, 10p, 20p, etc. Eventually they are correct.

Whilst explorers are generally valued on the potential delivery of future cash flows with volume, grade, accessibility, mining methods, processing mechanisms and geography mixed with varying degrees of optimism being the valuation drivers, producers are mainly valued on cash - on hand and generated annually.

BMN struggles to generate cash for a number of reasons, whether through operational issues or investing for future growth. As such, we are in a bit of a buyers strike currently which means that any selling puts pressure on the share price.

What the share price really needs is a couple of quarters of cash generation to provide that confidence. Experience suggests that this is most likely to be on the back of strong Vanadium prices.

Of course, specific positive news items such as Lemur offloading or significant BE progress could provide buying pressure.

Which goes to how that Hopium is a powerful drug on all markets!

'Hopium' is a powerful drug on AIM.

I sincerely doubt that the seller(s) know about the 2nd quarter production numbers. There has been consistent selling for weeks/months - it is just the buying that has been up and down.

There is no particular reason to believe that the results will be poor given that they have been experiencing stability in recent quarters. If they come in at a similar level to Q1 then it will be interesting to see whether full year numbers will be reassessed given the statement that production is biased towards H2 and kiln 3 at Vanchem should lead to significantly stronger numbers there. Assuming that kiln 3 has the anticipated impact on output (and there is always a risk for any new plant) then results in Q2 would have to be very bad indeed not to achieve the annual target.

Not unusual, no. We haven't seen it for a while but it has certainly happened several times since I invested.

You've got to love that UT. The games they play. All it will mean is that we will open an apparent 5% up in the morning despite the bid/offer not changing.

The shares he bought would have come from a Market Maker rather than as part of a matched trade. For BMN, a UT trade is matched, the others aren't. As such, it is legitimate to call a trade here as either a 'sell' to a MM or a 'buy' from a MM.

The real problem arises because the system does not associate a trade as either a 'sell' or a 'buy'. After the trade is published, the downstreams systems attempt to label trades as 'buys' or 'sells' based on the mid price of the spread. If this is fluctuating or the MMs are offering very different prices or the trade has a delayed publication, the system can label this incorrectly.

"I expected a better performance in 2H due to increased production and higher V price.
But in fact they did worse in the second half."

Did they?

"H2 2021 underlying EBITDA profit of US$3.3 million, supported by strong production levels, higher realised prices"

This seems better to me, at least on their EBITDA definition. On what basis was the H2 2021 performance worse?

A bit early and by no means guaranteed. India is going to see a significant rise over the next couple of decades - decades which I think the current superpowers are going to find challenging. China in particular has a demographic time bomb ticking. Africa has the added problem of finding a lot of their assets acquired by the major powers, particularly China.

That said, I am sure that everyone would welcome the development of Africa as a whole into a significant world player.

Slightly above currently stated SA inflation rate but I am pretty pessimistic on inflation in the medium to long term (although short term I suspect that the rates may cool). Actually, I think that the next few years are going to be tough so it will be interesting to see how these kind of deals hold up given other pressures.

Rand/USD rate will strongly influence this so I would keep an eye on it.

There appears to be a significant buyer and seller which are balancing each other currently. The 260k trade and one of the 600k trades are UTs so will be both a buy and a sell since this is a matched trade.

Normally I would suggest that the odd number of shares traded was a good sign that this is the last sale of a large holding but BMN has flattered to deceive in this respect many times in the past.

What you are describing is a problem with delivery which I already agreed was pretty poor.