Member Info for HarChris

In recent weeks the trolls have run out of arguments and resort to 'well if all you're saying is true why is the share price where it is?'

Soon they aren't even going to have that comeback to draw on.

Not relying on the sanctions, no, merely acknowledging that a 2018/2019 scenario is brewing yet this time BMN are producing ~4500mtV vs ~2500mtV the last time we saw a price shock, with an extra 1000mtV of finished goods to sell too.

I wonder what that would do to the share price knowing that the structural conditions are in place to see higher prices maintained? I can picture the derampers now saying 'this is all because of the high vanadium prices, nothing to with Fortune whatsoever' as if we'd care with the share price at 50p+

Throw in the news that US sanctions on Russian metals (including vanadium) is being stepped up and more rigorously enforced and that there seems to be no step up in production from the only other two primary vanadium producers in the world (Glencore and Largo) you've got to wonder how long it's going to take to see a supply deficit and a vanadium price spike occuring.

Is this 2018/19 all over again?

He sure puts the hours in does John, a real workaholic entirely focused on making a success of this company - is it time the name was changed to Harland and Wood?!

Volumes are tiny so the share price reflects nothing of the sort, it simply reflects a lack of interest in the stock currently.

If something catastrophic was brewing you'd be damn sure someone would have caught wind of it and would have set off a chain of panic selling. You also spent a lot of time suggesting this prior to the last update, particularly re load shedding and instead it turned out that BMN operations were just fine and in fact they now have an agreement in place with Emalahleni municipality which makes it even less of a risk.

In essence you're admitting that the shares are ridiculously undervalued in your eyes and are therefore coming to the conclusion that something must be seriously wrong behind the scenes. This is a normal human reaction HMHG and is why so many lose money long term panic selling.

I'm being highly conservative in my analysis by focusing on the mining side alone for now but there's a reason electrolyte plants are springing up all around the world - the simple profitable business model - something that will improve BMNs margins in the not too distant future... having their own (increasing) supply of vanadium to feed the plant is an added bonus.

There's a lot we already do know so the cash figure won't be a complete mystery. The vanadium price reported (FastMarkets for the US and AM for the rest) is reliable enough to get a good picture of what's going on. Last year the vanadium price averaged ~42/kg which should have, in theory, have made for a profitable year but as we know two major unknowns befell Bushveld - one was the far greater complexity and issues re Vanchem Kiln 3 refurb and also unforeseen Load Shedding. We know BMN started the year with $15m and did not fall to zero and that included 256mtV less sales than production. So last year was either a very small loss or very small profit.

We now enter 2023 with no ramp up costs to start with or additional teething issues (as the refurb has already taken place) and severe load shedding is now a known (with an agreement in place to mitigate against it. So unless something strikes out of the blue we can safely assume that BMN are currently generating ~$6.2m cash a month ($43.5/kgV - $26.5/kgV) * 4350mtV production / 12 *(there's a slight weighting to H2 so more like $5.5m cash generation now and $6.9m at these prices in H2).

Previously Fortune talked of discussions with Orion and specialist funders but with V looking so perky (today FastMarkets showing a tick up in US prices) we might find that Fortune no longer needs to pick up the phone with some commentary on the vastly improved situation coming with the Q1 update. Selling just 25% of the costed up inventory for example adds $11m cash to the kitty.

We'd all welcome your own analysis but as far as I can tell your role here does not stretch beyond laughing at others for sitting on paper losses.

The closest we've got to analysis from the trolls in the past few days is HMHG claiming that IIs will be sitting back and waiting for the inevitable debt default despite the fact that BMN are now generating tens of millions in cash - grrr I bet you're all frustrated by these strong vanadium prices as all you can do now is bring up the past and highlight that the share price has not rerated yet.

That's certainly true and cash generation will be phenomenal (all things being equal) this year but I just like to highlight how profitable BMN is currently and therefore what a strong position they'll be in when it comes to any talks Fortune is having with lenders currently.

I'm looking forward to the next quarterlies in seven weeks time more than I have done for a long while.

And given the fact that V back in November 2020 had sunk so low and we were only 8 months into the pandemic how low must the share price have been? 3p? 1.5p even??? No, 12.5p after the CLN was agreed rallying to 23p two months later!

This 5p is nonsensical and won't last now.

It's worth remembering that In November 2020 when the Orion CLN was signed V prices were:
Europe $24/kg, US $27/kg, China $27/kg. Dollar = 15.5ZAR

Light and day.

Starting with your $45/kg you'd need to subtract ~ $15k for tax and finance costs so call it $30m net profit.

BMN start the year with ~$10m cash + $30m nprofit makes $40m which equals the total debt due in November before accounting for any of the 1000mtV ($43.5m) being sold.

Debt is becoming a non issue but the market will be happier when we get clarity to confirm our assumptions.
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No changes in FeV 80% today - remains Europe $40.75/kg, US $44.75/kg, China $45/kg.

AB would have been better off though just taking a moment and letting those funds sit therein cash for a few days! Shouldn’t feel rushed to move funds around in this climate.

I’m back researching again with the aim of opening a few positions.

Well go on almost any other small cap BB and you’ll find people saying the same thing - institutional investment is not forthcoming at the moment. IIs have the freedom to pick and choose which beaten up stocks they want to take a position in over the coming months and there’s an awful lot to choose from. If volume were to pick up in the weeks and months ahead that would make life easier for them.

And no BMN aren’t 95% down, only from an all time high that only ever occurred very briefly. In recent months the share price has stabilised where others continue to sink lower and lower.

It’s also not as simple as zero II buying here means IIs therefore don’t see value at 5p, that’s not how it works. Volume is so pitifully low that there is absolutely no possibility of buying a meaningful amount of shares at 5p currently so for an II to take a position now they really are committing to building a holding at a much higher share price average.

There's a lot of risk off behaviour in the markets currently, there are tons of small cap miners who are looking strong operationally but miles off their share price highs of recent years. Instead of hypothesing the exact reason why the share price is languishing where it is I prefer to focus on the fundamentals and the figures... As things stand we're looking at $80m gross profit this year, putting all the possible theories aside does anyone really believe that if/when this is released by rns in black and white that there isn't going to be a reaction?

I think it's as simple as investors, with limited capital, are holding off to see in what direction the vanadium price moves next - if it remains stable/rises higher they'll accept they missed the bottom and join in on the run up at 8p, at 12p at 15p etc

If the distribution of our sales remains the same as recent years then currently we're looking at an average sales price of ~$43.5/kg. Cash costs given rand where it is comes out at ~$25/kg and AISC ~ $33.8/kg.

This in what has been described as 'conservative' guidance. Even the most negative out there must accept that the margins are pretty exceptional as things stand. Not a bad time to be sitting on extra inventory either.

'HarChris, I have sour memories of 2021 after being in ARB, DDDD, SNG'

Well Arb went from 6p to 300p in early 2021 so there's always the potential to be stung pretty damn hard from that scenario! As for the other two, well, small cap pharmas are certainly risky.

So after three days of sideways movement the rises resume - Europe now at $40.75/kg, US $44.75/kg, China $45/kg.

Nice.

AIM shares were still holding up well in 2021, HARL went above 50p a few times and was still around the 30p mark near the end of the year yet operationally speaking it’s light and day between then and now.

Who knows when it’ll change Xenor but the key is to invest in companies that are ‘gonna make it’ and for you to be able to wait it out for whenever it is that the markets warm up, be it a few months, a year or longer.