Member Info for HarChris

No serious investor is going to even bother glancing at advfn so I think it plays a useful role by giving some of the most deranged and bored a platform to post all their guff freeing up other forums for (relatively) sensible discussion.

'Gdr thoughts HarChris? +20%'

I shared my thoughts last week when it was 34.5p (that lack of funding in this market makes it difficult to see any share price appreciation even on good news) and now it's 31.5p. So unsurprisingly my views haven't changed.

Definitely. This in conjunction with the FSS contract will provide the fuel to leave this silly valuation behind for good.

As we know with you your word is your bond.

I think it's worth acknowledging that there's an alternate universe where the CLN could have caused BMN significant issues. This period through 2023 up until the repayment date in November, with capex reduced to zero besides sustaining capital, is a crucial one that frees BMN up to reap the rewards for navigating successfully through covid and increasing operational scale. If V had continued its downward trajectory from mid 2022 the outlook would be little less rosy, especially given the worsening macro picture, but it didn't, instead it levelled out before rising steadily from Oct 2022 to March 2023.

Just look at the difference in target share price RBC gives for such a small difference in group realised vanadium price:
Group realised price $36.50/kgV - target price 6p
Group realised price $40/kgV - target price 18p

Current group realised price is ~$41.5/kgV and perhaps a little higher factoring in Nitrovan sales which sets BMN up perfectly at such an important time.

'As reported in the going concern policy, the net debt to EBITDA ratio was breached at 31 December 2021 following the remeasurement of the Orion Mine Finance PFA liability. This covenant has been retrospectively waived by Nedbank.'

Didn't notice any consequences last time it was breached...

Anyhow for H1 EBITDA was $15.6m and Fortune spoke of on going cash generation through Q3 and Q4 so I would expect EBITDA to come in around $25m+ for 2022. Net debt? $65m-$70m which is less than 4 times EBITDA.

Oops - it cut out the last sentence but I think you can guess the conclusion.

BMN listed on AIM in 2012 as a pre revenue aspiring tin and iron producer with a market cap of 56.7m. 11 years and hundreds of millions of investment later BMN is now a profitable soon-to-be 5100mtV vanadium producer and you get the opportunity to buy in at £56 mcap, exactly the same valuation they were post IPO in 2012 - most would agree that's quite the deal!

Without a doubt if PI100 sold they'd be here absolutely willing it down still, possibly even more borne of regret and jealousy.

Exactly Ben. With any investment there are tons of factors one needs to consider but when you're looking at a company that has fallen so far below it's NAV (<50%) then it becomes a much simpler process. I can only think of a few reasons why a company could be worth less than its net asset value.

(i) The assets are overvalued on the balance sheet
(ii) The company is haemorrhaging cash hence likely to see NAV shrink in months and years ahead
(iii) There are very real risks to the business/sector that could materially affect the company in time (think Evraz and Russian sanctions).

(i) In 2019 Bushveld acquired Vanchem for (a reduced) $53.5m at a time when the price of vanadium had fallen so far as to make such a deal possible. V at the time had fallen to just $24/kgV in Europe and Vanchem was needing significant capex thrown at it - what would it be worth now with the price of V not far off double what it was and with the outlook for vanadium being so strong as a new storage use case emerges? Many times what BMN paid for it that's for sure. Then you have Vametco, the newly built E plant and 25% of Cellcube + 1000 tonnes of inventory ready to be sold into a buoyant market. So do we think there's any possibility the assets are overvalued and that is what's causing the disconnect? Certainly not.

(ii) This is an easy one - no BMN is evidently not burning cash right now, they are generating cash at this stage without any shadow of a doubt. This is only going to increase with further optimisation of Vanchem and increased scale in the future as well as improved margins from selling electrolyte (may still be a little while to wait on this front).

The CLN with Orion is the risk to assess here but as I've opined at length numerous times the risk is way overblown. Bushveld have every chance of generating the cash to cover it in full by Nov but they also have numerous levers they can pull to address it, potentially choosing to utilise one of those levers instead of repaying Orion in full with cash. The key here is that a $40m debt with a long term financing partner is not an existential threat to BMN, not when any further loan can be backed against over $300m of assets and when BMN are seeing such healthy margin + as things stand current assets (cash + inventory) exceed current liabilities.

(iii) Whilst there are issues in SA, nothing threatens the very core of BMN's business. Major miners are not leaving South Africa, they are not sounding the alarm. Many are now taking matters into their own hands and preparing to move off grid so as not to rely on Eskom but this a win/win as those businesses are essentially taking the strain off the national grid which will help stabilise it in time. The biggest geopolitical risks are Russia and China related and hence far more broad - this is not something specific to BMN and should be considered no matter what you're investing in.

Until BMN is trading at a far higher price the investment case is very

CC, you try to give off the impression you are a serious individual with an opinion worth listening to and then you go and claim that the user that has never once posted anything of note about BMN and quite clearly is on a childish wind up is the 'best thing on this board by far'

Quite revealing.

It depends on whether you believe the world is about to split cleanly in two between the US/West and China/Russia/Brazil/ME or whether all this rhetoric is simply an ever isolated Russia attempting to split the world in this way with China occupying their current position for political expediency, attempting to take advantage of the growing tensions but ready to dump Russia whenever its in their interest to do so.

Whilst you may be surprised to hear that I do in fact agree with plenty of your analysis I come to a polar opposite conclusion.

Far from thinking that management mistakes in the past are going to end up seeing the share price down at 3p, 2p, maybe even 1.5p, the opposite is true. None of the issues over the past few years have caused any temporary damage, the company is in great shape, all that is missing is the share price alongside. This is very different to, say, having run out of cash in 2022, been forced to raise just to keep the lights on, be burning through cash and be sat here wondering how on earth the company are going to be able to come to some sort of reasonable renegotiation with Orion. In effect a debt spiral.

The share price is deeply depressed because of rock bottom low sentiment, because targets have been missed too often and the market has lost faith in their validity, because there's been panic around the stability in SA. These reasons have got us to the ridiculous situation that a profitable miner with assets valued over $300m and manageable debt with a long term financing partner is valued at <$70m. And then there's the likes of you saying you'd only buy in at a much lower share price ($40m market cap? $30m market cap? $10m market cap?!) - perhaps you think Vametco, Vanchem and Mokopane + E plant and 25% of Cellcube is worth a fiver?

Far from ignoring guidance now I see it as an opportunity to catch the market off guard. The reasons for the missed guidance in the past year (Covid, expansion related issues and unforeseen load shedding) are not a risk factor this year (with disruption from LS factored in) and in addition Fortune has set guidance purposely conservative so there's a very decent chance of exceeding it.

Now let's take that guidance of 4200mtV-4500mtV. With V at $41.5/kgV and the Zar at 17.8 to the dollar do we need to hit guidance to return to profit this year? Not even close! With total costs likely to be around $155m so even 3800mtV would likely see BMN turn a profit in 2023. And if finally the corner has turned and we exceed guidance say at 4650mtV is achieved? Well that will see profits pushing close to matching the current market cap, a totally unique situation for something that has a reasonable chance of occurring.

So you're welcome to sit around and wait for 2p but the rest of us see a situation where easily achievable guidance would leave BMN highly profitable this year, a miss of over 10% still achieving profitability and a beating of guidance leading to the long awaited return in sentiment that should see this vanadium miner that's positioned to become a cash cow in the years ahead back at a more realistic valuation many multiples of where it is now.

I don't know when it will be but my opinion is that it stays around this level until some decent news lands and when it does, be it some M&A activity, new approved test, or even a DHSC out of court settlement in novacyt's favour then this does a move like it did at the end of 2022 (64p to 155p).

A little higher than that might be enough to tempt me to sell my shares.

Guidance for 2023 is based on a 16.78ZAr to dollar exchange rate. Average through 2023 so far is 18Zar and still at 17.75Zar after the strengthening this week so all in all BMN have a lot of margin for error here.

Q1 update in 3-4 weeks now is a biggie... we know shipments to the US at the back end of last year were sizeable so hopefully we will see that show through in the financials (I believe we'll see a cash figure this time). After the successful refurbishment of Vanchem Kiln 3 last year it's important to see improved production figures YOY and also looking to see the inventory being sold off, even if just ~100mtV in Q1.

With Fast Markets showing the US ticking up again (~$43.7/kgV) we're still at ~$41.5/kgV average selling price so any further gains and momentum in the run up to the end of April update would be a big bonus.

Following on from my post yesterday.

Take a look at the GDR share price action since their positive news landed... sure is a plus to be fully funded in this market.

As an economist I think I understand the basic concepts of supply and demand. I just happen to be more doubtful that a fixed supply is enough to make BTC a better investment over the long term than other assets.

I agree with you AB, that is bitcoin's big selling point, always has been, problem is we don't yet know if it will be enough to maintain the momentum and trillions of dollars being funnelled into it over the long term. It doesn't have a use case currently (no store of value isn't one, that comes with trust over time) and we don't know yet whether or not it needs one long term to generate enough demand to see BTC appreciation outpacing other assets.

There are tons of cryptos for example with a capped supply, very few people think those are going to rise forever.

There are currently only two vanadium focused primary producers in the world - BMN and Largo. Largo produces ~40% more mtV equ. than BMN and yet is valued 5X BMN with an mcap of £275m. Cash costs are also far too similar to account for the difference in valuation but they are listed on the nasdaq and are sitting on more cash than BMN + have less debt so that accounts for *some* of the disparity but 5X worth? Not for me when they are such a similar outfit operationally speaking and have just as many problems with their Brazilian jurisdiction (floods in particular) as BMN do with SA.

Then you have hopefuls like FAR that currently produce a fraction of what BMN are and at a significant loss - for 2022 ~150mtV eq, $6.8m revs, net loss $3.3m. Mcap $55m /No guidance for 2023.
BMN looking at ~$190m revs, profitable, Mcap $69m.

FAR need to raise an enormous amount to reach anywhere close to Bushveld's current operational size and yet there's a $14m difference in valuation...

'Any scarce asset will increase in value vs fiat, even Mars bars.'

Nobody thinks holding fiat/holding cash is an investment.

Almost everything increases in price, yes, but that then means that in order to grow your wealth you need to find investments that outpace inflation. I don't get this whole nonsense about rejecting fiat, or that fiat goes to zero. Does Bill Gates care that the value of a dollar is decreasing, do those with a big property portfolios care that the a dollar today is worth less than a dollar next year? No because they have even more of those dollars than they had the year before.and their purchasing power has increased.

Certainly avoid fiat that is making you poorer (such as Venezuelan Bolivar, Turkish Lira or Argentinian Peso) and then choose the investments you think will return the most (whether that be stocks, bitcoin, gold, commodities).

Equally if bitcoin, from now, appreciates less than dollar inflation then bitcoinners will also experience a fall in purchasing power.