Member Info for Daisan

Would not 40p stop losses be triggered at..... 40p? I haven't seen any trades yet sub-40p.

I haven't got any relatives left. All glue now! :)

Good grief

As sure as night follows day! Quite a drop. I suspect that end-November was some form of cut off.

It is an interesting debate. However, there are a few factors that need to be borne in mind.

Firstly, we are dealing with 'windfall' levels of Vanadium pricing currently - way beyond what FM would have considered likely in the short term and, hence, way beyond his budget. As such, there is materially more cash coming in that expected. Now, I am sure that FM can usefully deploy this cash but there is no doubt that it is a good fiscal discipline to return excess cash to shareholders whilst still pursuing a vision.

Secondly, developing Mokopane as a greenfield opportunity is beyond the current cash resources that are available to BMN and if we waited for the cash resources to be available through Vanadium sales, this would delay build and potentially result in Mokopane production arriving at a time when the Vanadium price is lower. As such, it makes sense to take on debt to build this earlier rather than later but there would still be cash within the company to participate (rather than the company's portion being via an equity raise) above and beyond that required for a dividend payment.

Lastly, a brownfield opportunity would only be taken off if it was a material discount to greenfield. And by material, it would have to be considerably less than 50%. If BMN did not have the cash resources to purchase this, then the same logic applies as for a greenfield operation above.

So, to summarise. The cash coming into the company is almost certainly more than would have been anticipated when generating an investment plan. Whilst this enables an expansion of that plan, it is likely that the requirement for cash to invest would still leave considerable scope for a dividend payment.

Or to summarize the summary - you can and should do both.

Apparently it was all just 'bants' though. So everything is good (even if the ability to communicate'bants' via a written medium is at best fraught with danger, of course it will never be misunderstood).

Sanchez599,

I am indeed but I also buy into the vision. But visions need to ultimately be more than words and the production increase should be translating into reality in Q4.

There has been a lot of discussion about the vision on this board which is great. But people need to understand the value chain to see how BMN can benefit. FM understands this by suggesting equity stakes in the VRFB manufacturers and the projects themselves. At the moment BMN benefits from the high Vanadium price and increasing production. Without taking the stakes in all aspects of the value chain, a falling Vanadium price (as ultimately we all know it will fall back even if to a higher than historic level) will benefit other aspects of the chain whilst negatively impacting mining profitability. BMN would only be recession proof by participating in all aspects of the value chain which is why this BE release was positive to me.

Paludina,

That is good to hear. I can't recall whether it was you that suggested the staff had been congratulated for 260 tonnes production in October but if they achieved that whilst ramping up further then we would be well on the way to showing the growth.

I confess that my bullishness for BMN is primarily centred around the strong Vanadium price and BMN's potential for growing their production capability. But the latter requires the evidence in the form of the quarterly updates and so far we are not operating at 3750 tonnes. I can understand the potential for ramping up but this needs to be confirmed. This is why I am looking for quarterly production for Q4 of 800 tonnes. Otherwise we are only operating at the previous level of production.

Possible

https://twitter.com/preempt1/status/1067753202609606656

https://twitter.com/preempt1/status/1067754679709265920

It is an interesting area. There is a twitter discussion around the inability to produce VRFB purity level electrolyte from magnetite based Vanadium, the argument being that sediment based Vanadium is better and the cost of purification from magnetite is prohibitive. Of course, this was primarily posted by someone with a vested interest in a sediment deposit but worth understanding nevertheless.

Yes, but that is for the BE objectives and specifically relates to those activities with third parties so, be definition, this would rely in ex-Bushveld capital.

I see no reason why there should be dilution just for an additional listing. Dilution is to raise cash for an objective and a listing is a means for raising that cash not the objective. I have seen a number of other dual listings where no money was raised at listing. As such, I am still anticipating a dividend policy.

That said, there are several projects that would require significant funding - beyond current cash resources I would have thought. The obvious examples are Mokopane development and brownfield acquisition (I would be amazed if we could 'do' another Vametco). It will be interesting to see where the policy fits with this growth strategy.

I don't think that the significance of the strength of free cash flow can be understated here. It makes everything much easier. I could well imagine without this cash that a lot of the plans would require significant funding from third parties and would be extremely difficult to raise. Being able to fund a significant portion ourselves is a huge bonus.

I notice that this went to Lundin Gold last night for financing Fruta del Norte (a great project indeed). But was this actually a better deal than buying an asset that is now producing monthly EBITDA virtually the equivalent of the buy price?

Daisydog,

I think that it is a reaosnably good start in ensuring lowest quartile production of electrolyte by providing lowest quartile production Vanadium feedstock from the parent rather than buying it in the open market. Clearly they want to take an intermediate product for use in the production of the electrolyte which should reduce costs further than otherwise would be the case. I think that there is a sound basis for a lowest quartile operation.

I don't see a short squeeze and the evidence is that there is a seller that can be called upon when required. Presumably one of our ever reliable 'partners' that took part in the placing.

kevkan,

This was never going to be the case. It is all theory at this point so, whilst I am sure that they have internal business plan numbers, these will never be shared with the market. The news here is outlining the strategy and how they are going to achieve that. Aspects of this clearly have value but at the moment it is up to the market to determine what that value is (actually, that will always be the case but you understand my meaning). It will be some time before there will be revenue related numbers available to the market.

"These activities are important in verifying Bushveld's objective of using an intermediary vanadium product from its mining and processing activities to reduce the cost of conversion into electrolyte."

You suspect that this is critical to both cost and timing. Initial results look promising but I have heard that many times in company releases so this is worth keeping an eye on.

"Discussions with potential electrolyte customers ongoing with Bushveld Energy expecting to supply samples in coming months."

It will be interesting to see who these companies are. There are a number out there but some customers are more equal than others!