Member Info for HarChris

This from the link below:

‘The cumulative installed capacity of electrochemical energy storage in China is expected to reach 100 gigawatts (“GW”) by 2030, with VRFBs expected to represent 30% of this capacity or approximately 180 gigawatt hours (“GWh”) using an average duration of 6 hours.’

180GWh requires ~950000mtV by 2030. Current supply is ~120000mtV annually so we could be potentially talking more than current total global supply needed per year over the next seven years just to meet Chinese VRFB demand.

Around 78% of global supply currently is derived from co production, the majority of which comes from China and Russia. There is no expectation for this to increase over the coming years so the tens, possibly hundreds of thousands of tons of production need to come from primary producers (Largo, BMN, Glencore) and new greenfield projects which come with a hell of a lot of risk - be it permitting delays, failure to secure funding and executional risks.

If the forecasts for Chinese VRFB demand (not to mention the maturing of Ex China vrfb markets) over the next seven years turn out to be even close to accurate then there's a hell of a shake up coming for the vanadium market and imo we're facing another scenario like that of 2018/19 in the not too distant future.

Helpful comparisons, thanks Andii

I think we've got to keep perspective sometimes and remember that missing management targets and making significant progress are not mutually exclusive things. If Fortune continues to grow the company but falls a tad short on his own ambitious targets is that worse than a peer failing to grow output but hitting targets because their own targets are far more modest? How many other AIM miners are consistently hitting management targets, year in year out?

Production is increasing year on year, they have returned to profitability, they are about to become a dual revenue company as BELCO enters operations, they are close to completing the first solar/vrfb mini grid in Africa and have positioned themselves excellently to benefit from the ever critical metal vanadium is becoming.

Our closest peer Largo is valued at £230m. In 2020 they produced 6650mtV equiv, vs BMN's 3630mtV. Last year Largo produced 5800mtV equ. vs Bushveld's 3842mtV. Largo's production has gone from being 83% greater than BMN's to just 51% greater. The difference this year is looking like it will fall below 50%. Perhaps a reminder that this is a tough business and why it will be difficult for new producers to hit the targets they are setting themselves over the coming years.

It is important that as time goes on Fortune has a better grasp of where the company is heading and sets out a realistic picture of what the future holds but he has acknowledged this and so far so good for this year, we are looking good for record production for a second consecutive year.

If next year the production run rate reaches 4900mtV then yes technically they will have fallen short but at a £50m valuation currently would that be the thing to focus on most? Perhaps this sort of discussion has more merit when BMN are valued 3 or 4 times higher than they are now.

I do think the article is well written and well argued. There is no 'correct' path to take when it comes to IslandMagee and it will very much depend on your risk tolerance and your target share price although I do think taking on the FSS contract and IM at once seem like a near impossible feat for Harland and Wolff at this stage.

For John Wood there are other things to consider. Selling IM for £50m cash will substantially derisk this investment and will lead almost certainly to a share price in a far higher range than we've been seeing (disagree with Xenor here) and alongside the cleaning up of the balance sheet and debt reduction will give management far more funding options going forward.

It's really a question of whether John sees more potential from a JV and retaining a minority share or from the billions of new business contracts that the company has previously flagged as in their crosshairs + the cash injection + significantly increased funding firepower.

Whatever route they go will be positive so fingers and toes crossed that this JR goes our way!

And I was talking ‘net debt’ the whole time which is a metric bandied around on here regularly, not ‘total debt’ - the former is reducing quite significantly although we are only estimating cash figures - should get a better picture in the full year results if they give an up-to-date figure like they did last year.

I have to hold my hands up and say that I have assumed a few too many things like conversion of the cln at 8p, because, well it's highly likely and probably overestimated the cash figure.

As for your other points I don't think what you're saying is fair. BMN are quite evidently sitting on significant cash right now, we were given the V prices in Q1, cash costs and ~100mtV of inventory was sold which is >$4m added to the cash pile. What we also know is that Fortune is a very cautious CEO and whilst there's every expectation that V prices will be well supported through 2023 and into 2024 he's not the type to leave things like this to chance. With a global recession looming this deal protects them against any worst case scenario playing out.

On the flip side this will be the last refinancing for a long while now and the plan will be to kick on with the 4 stage expansion to 8000mtV as soon as the 5000mtV steady state run rate is achieved, probably around a year's time. To me it seems sensible to retain as much cash as possible so that they have adequate firepower for (i) expansion, for (ii) for BELCO, (iii) for further investment into Cellcube.

In other words restructuring in this way means we can be near certain that BMN won't need cash for any purpose for the foreseeable future.

Don’t lose sight of the fact that BMN are soon to be a 5000mtV producer with an AISC of $32/kgV or lower. The moment V heads back into that mid 40 range and above huge profit is made and the balance sheet is completely transformed.

This will almost certainly happen and in the meantime they’re still operating with a healthy margin and generating cash.

It's only four months til the 2023 interim results are released so not that long to wait for the up-to-date financials you're craving hxulcolrdoh.

Friday evening and the bb is dominated by self-declared non investors... doesn't that tell you something?

I'm going to take a bit of a backseat and post less on here over the coming weeks and let this play out in its own time. Funding is sorted and BMN are sitting on ~$45m cash and are, at the very least, generating a small amount of cash on top, no cash burn like we saw in 2020 through to 2022, so that cash figure will only grow. I see no reason to post daily V prices as the near term risks are virtually eliminated (funding secured and load shedding far more under control). When V bottoms and rebounds doesn't really matter now, whether it's two weeks or two months.

Could we see a perfect storm later this year with V rising, BELCO off takes, BE Carve out and VRFB gaining further traction? I think so. Time to sit back and see what the rest of 2023 has in store!

He may be honest but he doesn't know what he's talking about if he thinks debt is an issue here now.

The total debt has been reduced by $18m and cash has increased $27m... this time around there's nothing going towards expansion, it's all cash generation for the time being so we are looking at net debt reduced from $76m at the end of June 2022 to $20m today.

With almost $30m of inventory net debt is eliminated simply by selling the stockpile which now can be held back until we see elevated V prices later in the year. BMN are still generating cash after a sharp decline in V prices and will be making hay the moment they rebound.

Haha that's actually a half decent attempt at negative spin!

8/10

PI, it's going to be incredibly hard to just bumble along with $76m debt unless they generate consistent cash along the way to pay it off and that isn't going to happen without further financing. If bitcoin goes up further difficulty is just going to increase alongside and adding 0.3EH/s through the rest of 2023 is not going to cut it. Not to mention the halving in less than 12 months from now... how many coins a month do we think Argo will be mining then? 70 tops?

As AB alluded to they need to build a compelling case for investment and then bite the bullet and place at whatever price they can get for as many shares as possible - maybe then they'll just about be in with a chance but they are sure as hell up against it now unless the next bull cycle starts up soon.

A big thank you to all of you that have been sharing commentary throughout the JR - not been free to listen in myself but it's been a huge help following along on here.

You're arguing with an account that was set up in March with the sole intention to bash Bushveld. Of course they aren't going to admit that this is positive.

Good summation AB but you're missing a key point... what compelling investment case is there to stump up cash for an Argo placing? If Argo attempt to dilute 20% = £10m what do Argo do with that? Pay down some debt? Then what?

The bigger issue is that I can't see them raising any cash whatsoever now. If cash runs out before the next manic bull phase then the share price craters and they perhaps get bought out for a few pence on the pound and that entity might then throw some serious cash at the problem with 100% ownership.

A few on here have been highlighting the net debt figure as a big red flag for a while now so let's have a look at how this refinancing changes things alongside the significant cash being generated through December into April:

June 30 2022 - net debt $74m
Today - net debt ~ $20m

A reduction of over 70%... how's that for a big bright green flag?

Additionally the 800mtV inventory has a current cash equ. value of $29m but as there is no need to sell into these lower prices we can expect much of this to be converted into higher margin electrolyte over the next 18 months and the rest sold when V is back above $40/kgV (and $45/kgV in US).

This time next year we'll be seeing a positive net cash position.

With cash of ~$45m, 800mtV inventory and optimistic projections for V prices over the coming years this could easily be the last financing BMN ever needs.

Today’s news derisks the investment almost entirely at this lowly valuation and gives BMN a far longer time horizon for the vrfb market to mature ex China (and hence build up to the 8m litres of electrolyte production) and for supply tightness to push V prices higher.

2023 will be transformative.

First troll to show their face and it was as stupid as I was expecting.

If Orion had doubts over BMN’s future the last thing they would do is lend MORE money. They could have just forced BMN to pay them what they will have by November (~$25m) and taken the rest in shares, leaving BMN to either self fund operations if V was playing ball or find a new finance partner for additional funding.

They’re here for the long term.

Not too late for our Goat friend to jump on board and ride the BMN train.

Coffeecups waiting for his 1.25p entry though.

Around US $39.5/kgV, Europe $33/kgV, $34.3/kgV ROW

Taking BMN's sales weighting:
V ~$36.7/kgV
AISC ~$33.8/kgV
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Loudspeaker's above post lays out why it's not all that useful but the TLDR version is this:
Jan-mid April = Highly profitable
Mid April - now = Slightly profitable, closer to B/E

Many reasons as to why V is likely bottoming which I may go into over the weekend.