Member Info for HarChris

The broker report you refer to has expected V prices of $35/kgV and you’re talking $40/kgV and $45/kgV so obviously the predicted profits are low.

I get breakeven at $35.9/kgV at rand17 which includes everything you’ve listed besides, of course, tax which only comes into play if V prices are above the breakeven price.

When projecting ahead we've got to expect the increased operational scale to start showing some cost-benefit. Reaching steady state production of 5100mtV should be possible with only continued sustaining capital similar to this year's $9.5m and inflation should be tempered slightly by the Vametco mini grid so looking ahead next year when forecasting profits it's reasonable to use ~$33/kgV as future breakeven price and closer to $30/kgV if more positive on management's ability to execute successfully.

The profits balloon once you start factoring in Bushveld's near term production and cost-base potential, not to mention the improved margins we should start to see as electrolyte production reaches 100MWh+.

‘$40 or below is only going to be meh profits for 2023. Need V back up to $45kg to net above $20M. ‘

It’s a tad better than that I’d say Ben… as things stand we’re looking at breakeven, net of all costs (cash costs, executive pay, sustaining capital, interest expenses etc ) of ~ $34/kgV as long as the dollar stays at 18 or above through the rest of the year.
So at $40/kgV average sales through 2023 we get $26m profit before tax and at $45m/kgV we get $47m pbt.

Sure the latter is much better but the former is over 40% of the current mcap. Not ‘meh’ whatsoever.

I'm not talking up big profits for this year now until we see V settle and start to rise. For now we know there was significant profits being made in Q1 (~$41/kgV average sales price), but that will have fallen to below $40/kgV now, maybe as low as $38.5/kgV. With the rand so weak however and April's production figures (Vanchem) starting off on the front foot there's every reason to believe that Q2 will be another profitable quarter.

As for Q3 and Q4, well, we'll have to wait and see.

I personally strongly disagree with your own thesis Will on vanadium prices as I don't think we'll see the vanadium market play out as it has in the past - the battery sector decouples the symbiotic relationship in China between production and demand and ensures supply tightness no matter what the steel sector is looking like.

But we shall see.

That's a realistic outcome I think CS, with possibly novacyt demanding some compensation ($10-$20m?) to cover a fraction of the $81.5m counterclaim.

The market would certainly react positively to either of the above, especially if between now and then Novacyt have shown a bit of an improvement on the operational side.

There were many, including myself, that said 2023 was going to be the year that the profits would show through and the market could no longer ignore it any longer. Four months in so far and it hasn't happened but I still believe it will this year.

The recent improvement at Vanchem is very welcome. 141mtV in March is a hopeful sign that the 2500mtV steady state run rate can be achieved and it's rather helpful to know that April is going to at least match it/surpass that figure - a rare heads up on the next quarterly update from Fortune.

This recent update now gives me confidence that BMN can reach 5000-5400mtV within the current cost base, especially when you factor in the mini grid reducing costs at Vametco slightly. Without further funding. That will bring Bushveld's breakeven price right down to ~$30.5/kgV at 17 Rand and insulate them from downturns and set them up to be making $50m at just over $40/kgV and $100m at just over $50/kgV, both very possible scenarios.

Another plus is that we're over the longest period of the year without updates. Within 9 weeks today we will receive the full year results that will include up-to-date commentary as well as a more up to date cash position (31st Dec & most likely 31st March, too. We then get the Q2 within 4 weeks closely followed by the interim results within 6 weeks of that.

I can still see sentiment recovering this year as V finishes its pullback and begins to rise into the next results, just as BELCO enters operations and off take agreements are announced. Investing, especially in AIM stocks, is a funny old game. Just when you're at your wits end, just when you lose all hope, often that's the time when things changed in the blink of an eye.

You just know if Argo were to announce bankruptcy the rns would read:

The board are pleased to announce a permanent change to the continuation of Argo Blockchain as a financial entity. This change has been long overdue and culminates what has been a challenging but exciting journey.

The sad thing is when this eventually recovers none of the people behind these accounts will have the humility to acknowledge that they were wrong to ridicule those sitting on paper losses, none of them will give anyone credit for sticking with their guns, having conviction, digging in and buying more despite the ever falling share price .

In the real world you have no choice but to eat humble pie, online you just delete your account and disappear.

'i don't agree - i don't think all investments should be considered gambles.
i didn't buy into ncyt expecting it to be so. and certainly not with the amount of cash i ploughed in'

But that's kinda the point isn't it? It's all a type of gamble, educated risk taking, because there are a tonne of unknowns in every investment, some are known unknowns (like the outcome of the dispute) and some are even worse, like the dispute was when it first landed (an unknown unknown).

If one does their research and thinks their AIM investment is safe, well, they're a tad naive. I look at novacyt as pretty much the same outfit as it was when David took over, minus £15m in cash (much of which was already earmarked for the LTIP payouts) yet a sixth of the share price (300p). Whilst a lot of the fall is due to a lack of operational progress an awful lot of it can be ascribed to the total collapse of liquidity on AIM.

Be honest, have you ever come across a more ironic depressing opening to an update than this, today:
Operating Highlights

? Energized the Helios facility in Dickens County, Texas and commenced mining operations on 5 May 2022

A few lines later:
Sale of Helios & Hosting Agreement with Galaxy

And yet it's all packaged as positive and progress!

'Every miner has ageing rigs ... name 1 miner that has all brand new rigs running ?'

The issue isn't that Argo has *some* ageing rigs, it's that the vast majority are ageing rigs and they have absolutely no capacity to replace them. One quick example as a comparison is CLSK. By my calculation ~ 70% of their rigs are less than 12 months old.

In essence Argo will be looking for funding to replace the machines they already have that are failing to turn a profit as it is. Not exactly a compelling case to take to an investor is it?

'i think some people would prefer to "invest" rather than "gamble"'

Fair enough, I get that, although I believe every single investment is a gamble, whether or not you describe it as such.

On one hand you are acting like this is a coin toss where Heads is 5 times return and Tails you lose, but also where Heads has a far higher chance of success. That scenario, that you believe to be the case, is an incredible bet that is weighted so heavily in your favour that I'm surprised you are holding still begrudgingly (/not buying more).

I think your posts are becoming more and more unclear and contradictory, not that it matters.

No it's not to have a dig - you're calling it a binary bet between losing your money and seeing it multiply 5 times from current level. You have also stated numerous times that you think ncyt will come out on top and hence you think there's more chance of seeing 5 times return from here than losing the lot.

Pretty amazing odds.

'lose dispute v win sp crash v £2.50+'

If you really think that then of course you'd hold at 50p unless you thought losing the dispute was 5 times more likely (but you've already stated you expect NCYT to come out on top).

He quite clearly stated that whilst profit could be calculated for Q1 obviously profit can't be calculated for the rest of the year because commodity prices are impossible to predict.

That is true for every miner on the planet - try calculating BP or Shell's profit after Q1 and see how accurate you are at the end of the year. (You'll be wrong).

Whilst it's certainly true that Europe and Chinese FeV prices have pulled back fairly significantly the US prices are more up for debate, with at the very least US FeV holding at ~$40/kgV - as it happens however it really doesn't bother me right now.

The exponential growth in VRFBs is very close to reaching the point where it shifts the supply/demand meaningfully. A jump from ~120MWh in 2021 to 400MWh in 2022, although symbolic of what's to come, only meant an extra 1500mtV of global vanadium needed, an amount that can be matched with production. This year's jump from 400MWh to ~2000MWh would require an extra 8800mtV, an amount we will all agree is likely to place stress on global supplies.

IF prices remain at this modest level it will keep attention off vanadium and onto other metals, like graphite, like lithium and with a backdrop of tightening credit is going to make it rather difficult for planned projects to get the funding and be green-lit. As long as prices remain high enough across BMN's sales base to continue self funding operations then what we will likely see is ever tightening supply until something eventually gives and V prices snap up sharply.

The weakening rand gives Bushveld an even bigger cushion and there are still left field cash injection sources, like Lemur (especially with coal three times the price it was pre covid). In other words if BMN can just keep ticking along as they are then they are perfectly placed to see exponential growth whenever the vanadium price inevitably turns.

And when it does the share price will rise more than enough to make up for the years of paper losses.

It's one of about 10 shares I follow and there was an important update this morning. As I've stated numerous times on here I like to share my views to see if I get useful pushback that makes me readjust my opinion and potentially throw some money in myself. It doesn't seem to be the case so I'll leave it at that - good luck.

They talk of increasing their mining capacity (whatever capacity means) by 55% since Jan 1st 2022, well difficulty has increased ~95% in the same time so they are mining less coins. They are also *way* worse positioned to grow compared with Jan 1st so without doubt that chasm is only going to get bigger.

They talk of navigating through a difficulty 2022 and coming out stronger - really? They sold their flagship asset which gave them a USP, they sold brand new in box machines and still they are looking now at nearly $60m net debt.

I'm happy for you to share the key points that I missed that could change my mind.

I'll be honest I'm here out of interest and morbid curiosity - I can't quite work out why a bitcoin miner with assets of at most $20m (~2EH/s of aging machines), no non collaterised assets, loss making, net debt of $56m and in a treadmill sector where standing still leaves you sprawled out in a heap is somehow valued at $71m.

I'm intrigued to see if I turn out to be right or if I'm still somehow completely missing something.