Member Info for HarChris

The DHSC did what they did because they thought Novacyt were in no way capable of standing their ground and seeing it through all the way to its conclusion, it would have been assumed to be too damaging and hence the DHSC would have expected Novacyt to do exactly what you've stated, agree to walk away with what they already have.

Now we've got to this stage I don't think it should be underestimated just how much sentiment and credibility winning would bring back here. It would show real steel and determination and prove that the decision to fight this was in the best interest of shareholders... in whatever form winning were to take.

We've got to believe that the company are being truth when they continually double down on their 'strong claim' statements.

'at the moment...My thinking is that the company might be prepared to just walk away ..losing money owed to just put the thing behind them..'

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It's not my thinking whatsoever. Having waited this long and allowed it to be as disruptive as it is the only logical thing is to see it through to the end and pursue maximum return unless an out of court settlement is favourable enough to make it beneficial.

Leaving it over two years to then decide to walk away is the worst of all worlds.

How it reacts and where it ends up are going to be two very different things most likely.

There’s too many variables but as you’ve asked this sort of thing a few times I’ll attempt a reply.

Imo with no dhsc dispute clouding the investment we see at a bare minimum a market cap far closer to cash level, as long as there’s no heavy cash burn going on. I’ll take your scenario and acknowledge that it’s a best case one and say anything from about 120p to 300p depending on whether there’s been significant operational progress / momentum in the preceding 8/9 months as well as what the wider market and economic landscape is looking like.

The main reason the Argo chat has slowed to a crawl is because there's nothing to discuss. From what we can infer Argo is in a troubling place right now, they were forced to sell brand new machines instead of plugging them in late last year before being forced to sell their prized asset Helios, the flagship asset that gave them the potential to compete with the big north american miners.

We've all been waiting for a Q1 update to give us more insight into the cash burn and how long they can survive before needing to go back to the market to ask for 'keeping the lights on' funding. There's been no communication on this front which to me means (i) we aren't likely to get a Quarterly update and (ii) most likely that's because they don't want to announce the current state of affairs as it will tank the share price further and all but eradicate any lingering chance of getting a placing away that sees them through to the next bull run.

Not a dig at you, just saying it as I see it.

There's a combination of factors at play here including incompetency, possibly lack of management determination, a totally different economic landscape, a lack of government support for the industry as promised (and an active attempt to virtually bankrupt us via the DHSC dispute).

And I've probably got myself to blame for thinking it would be fairly easy for the company to leverage their newly built relationships and brand recognition to transition into a post-covid world. Maybe my own expectations, looking back with the benefit of hindsight, were unrealistic.

What stealing are you referring to? As far as I can tell all that's happening is a tiny agile diagnostics company generated an enormous windfall over the pandemic but since, the management team, most of which are newly installed, have failed to grab the bull by the horns and seize the opportunity they were presented with and instead, at least on the surface, have returned to operating like they were previously - except with an enormous cash pile that ensures solvency long into the future and provides opportunity to grow inorganically through M&A.

And whilst I'm sure what you're referring to is the salary the BOD receive for what seems like a terrible job it's worth remembering that in 2019 with the company close to insolvency Graham was earning £265k and Anthony Dyer £160k. Company's pay themselves a handsome sum to start with, sometimes even eating up placing money to make sure their needs are met first, it sucks but it is what it is.

There isn't much of a case to be made for the current BOD being overly extravagant given the amount of cash they have at their disposal currently. Doing a poor job sure, stealing though?

Rather than it predicting the JR outcome the share price reflects what we've been seeing over the past twelve months, far bigger falls in price on bad news vis a vis rises on good news. For that reason I suspect many are simply staying on the sidelines in the hope to win the fastest finger race if the JR result is favourable with no downside risk if it's not.

Having said that when exactly are we expecting JR news? Was it 8-12 weeks JW said hence early to late July?

Look at the one year chart for lithium, tells a slightly different story:

https://tradingeconomics.com/commodity/lithium

To add to yesterday's post Fortune reiterated in the most recent video that Vanchem should be running at 2500mtV+ before 2023 is out. Vametco exceeded 2700mtV in 2022 which means at the very least we should be seeing Bushveld producing at the lower end of the target 5000-5400mtV range next year without any additional capex needed, reached within the current cost base.

This year's B/E price using the 4350mtV guidance midpoint is $35.5/kgV at 17R. Assuming wage and material inflation of 6.5% and also a small drop in electricity costs at Vametco thanks to the mini grid this means we could well we looking at 5100mtV production next year with a B/E of just $31.5/kgV at 17R, weaker rand and that might just flirt with the 20s.

Add in Bushveld's ability to prioritise higher value and higher priced markets and we may be just six months away from a considerable de-risking inflection point that sees BMN become a profitable entity in all but the very worst case scenarios.

No I don't think that's the case Poidster.

The enormous loss of liquidity seen on AIM will be at the heart of it, the risk off nature of the markets right now (especially small caps), the DHSC dispute hanging over the investment.

Management appears to be more comfortable toiling away in the background and protecting the cash pile whilst waiting for the next twelve months to play out (either dispute sorted in court or out of court in the meantime). Once that dark cloud has passed I suspect the share price rerates to around cash level and then I would expect M&A activity to quickly ramp up from there.

I highlighted recently how tough the markets are using Biosynex as an example. Most of us have been envious of their approach, of the proactive way they have been executing their strategy over the past eighteen months, going after M&A, growing revenues, building new revenue streams etc and yet even their share price has fallen to such a degree that novacyt could buy them out with cash right now.

I don't think we'll see any new supply before 2024 is out and would hazard a guess V has only fallen as far as it has because producers delved deep into their inventories to make the most of recently elevated prices in Q1 (take Largo for example selling 700t v205 more than they produced).

And yet even at the bottom of the V price curve BMN remains profitable, with the ability to pivot even further to the high value markets that are growing in market share. We know what will happen when the price starts moving back up that price curve...

And then let's go back once again to the message Bushveld have been repeating:

' Sales into the higher value markets (aerospace application, speciality alloy and chemicals) and higher price markets (Nitro Vanadium in North America) continue to be prioritised to maximise income. '

This shows up that Ex China demand for titanium is up (speciality allow/aerospace application) and so is chemicals... this bodes well for seeing higher margins long term in addition to the expected improvement in margins we'll see from the electrolyte business.

The biggest takeaway for me is those China numbers. We know that the vast majority of China's vanadium production comes from steel co production and therefore supply coming out of China roughly aligns with steel prices/production/demand. It's been a fairly symbiotic relationship up until now but a 5% drop in the market share from HSLA steels in just one year shows where this is likely going...

Going to be interesting to see how this plays out over the next few years.

The last placing was in October 2020 with gold averaging ~$1650/oz over the preceding twelve months.

In the past twelve months gold has barely even touched that level and is now firmly averaging $2000/oz.

And to think that placing in Oct 2020 was at 16.5p and now Shanta as a 100K Oz producer making $75m+ EBITDA is trading at just 11.5p.

What a totally random response to ‘more vanadium rises’

And unless I’m mistaken I don’t think anyone has said they are all in here and even if one person did it doesn’t warrant every single negative poster coming on today to sanctimoniously state that it’s a reckless thing to do.

On any comparison basis the current share price is beyond ludicrous. You go back three years today and you find yourself wham bam in the middle of covid, global lockdowns, V average $24/kgV across Bushveld's geographies, the very real risk of failing to achieve funding to continue operating and STILL the share price was 14p. Later that year after funding with Orion was secured but with covid still a major threat the share price peaked at 23p.

Significant progress has been made since, VRFBs are making a meaningful impact on the vanadium landscape and we're getting strong signals that the long term average price of V will settle at a much high level than it has historically.

Sure we're not the only shareholders moaning about the disconnect but imo our particular disconnect from fundamentals is about as extreme and egregious as any out there.

It's also frustrating how, in the heart of a crisis and in the six months or so following we hear continual bombast and bluster from senior politicians about building a world beating diagnostics sector that will be the envy of the world etc only for the pandemic to disappear from public consciousness and all discussion to grind to a halt.

Frustrating but unsurprising.

Fab, really appreciated.

@Paludina do you have an updated chart that includes March and April shipments?

‘ sales into the higher value markets (aerospace application, speciality alloy and chemicals) and higher price markets (Nitro Vanadium in North America) continue to be prioritised to maximise income.’

Could well be seeing that 45% of US sales mix rising giving us far better margins than we’ve been estimating…

'@DuaneHope5

Vanadium Market: While steel demand is down mainly due to a muted reopening of China, aerospace demand for vanadium was a bright spot in Q4.

Increased VRFB electrolyte capacity & installations, reveals that VRFBs are gaining momentum'

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When an increase in aerospace and VRFB demand (combined 3.6% of global demand in 2021) is enough to balance out a fall in steel demand (92% of global demand in 2021) you know that you're reaching a mighty inflection point.