Member Info for HarChris

Bushveld have matured to the point where they should be able to expand going forward through self funding, from profit generation. I think that will remain the modus operandi however if there comes a point where the share price is strong and Fortune has IIs knocking on the door I would imagine he will take advantage and get a placing away to supercharge expansion plans. And in those circumstances it won't be done at much of a discount.

December 2020 placing @ 175p raised £22.5m
November 2021 placing @ 100p raised £29m - ST warrants (expired) @ 150p, LT warrants 225p
Siemens Gamesa 175p warrants extended to May 2024 by IES as a sweetener to maintain partnership.

Is the huge decline in share price a result of poor progress / a failure for VRFBs to catch on? No, the complete opposite has happened in fact! Progress is impressive, especially in the past 6 months and vrfb adoption is happening at pace.

And yet all this for under 40p a share right now? Make it make sense!

Hxul, it is certainly true that BMN has up until now failed to fulfil their potential since 2019. This is for a variety of reasons, some of which are self-inflicted and others which were totally out of their control, such as the covid pandemic. It is also true that the share price back in 2019 averaged ~31p across the year and peaked at 45p.

So we can all agree, even the most ardent bushveld supporters (I hope!) that progress has been slow and steady rather than breathtaking (record production in 2022 but many issues that have hamstrung the business). The question is, are those goals you talk of back in 2019 still achievable? Let's go through them...

- 8400mtV production in the 'near term' - well in the very near term no but the company laid out plans last year to reach that target so yes, still very much the medium term target for Bushveld.

- - 'Vametco on its own had 2020 expected estimated output of 3000-3200 mtV' - well i'm afraid covid reared its ugly head in 2020.. still over 2700mtV this year at Vametco is a mere 10% off that ambitious target.

- '- Leadership in a revolutionary Vanadium based battery technology' Very much so yes and we're just starting to see the benefits of that now (higher V prices thanks to increasing energy storage demand, championed by BMN) and will soon see it through Cellcube's success.

See where I'm going with this? We all agree that progress has been slower than was hoped in 2019 (not that I was around then) but today it's all about evaluating the company against the share price. It isn't 45p or 30p, it's not even 5p right now! And yet the future that was promised back then is still very much a reality...

And another way to look at it:

Vanadium demand is expected to increase dramatically over the coming years... how much would it cost to replicate what Bushveld currently have? A few hundred million dollars? Yes, and the rest. Meanwhile Bushveld are well placed to be generating tons of cash whilst new hopeful vanadium producers spends years and hundreds of millions attempting to reach Bushveld's production capacity. And how easy will it be for others in this climate to raise the sort of money needed to get there?

$80m debt is nothing backed up against 4350mtV production, ~5200mtV in the very near future, ~$8m in cash, 1000mtV of fully costed stock equalling $42m of goods to be sold, 25% ownership of VRFB manufacturer Cellcube, a 4MWh hybrid mini grid at Vametco and a 200MW electrolyte plant that can be scaled up to 800MW.

Well you should point out that:

(i) They have $300m in assets
(ii) They have been building an electrolyte plant that's soon to be in operation
(iii) They own 25% of a vrfb company that is likely to be valued in the 100s of millions in the future
(iv) They have not been losing money - Bushveld started 2022 with $15m and with that managed to refurbish kiln 3 (and hence grow production enormously) and make it through the worst load shedding South Africa has ever experienced as well as choosing to pay off the Orion interest payments this year. If they were burning through tons of money they would have needed to raise this year.

(v) They are currently making money - guidance for 2023 has (albeit disappointingly) breakeven at $35/36kgV and current prices are considerably higher than that, ~$41.5/kg across our products and geographical split and hence a healthy margin. Additionally Fortune made it clear in the call that guidance is very conservative and very much wants to beat expectations this year... so it's fair to assume that breakeven will come in below $35/kg so with V merely staying where it is we'd be looking at ~$31m profit this year - not that bad for a company currently valued at $72m, eh???

(vi) The debt is being dealt with - by this time next year it will be down from $80m to at most $50m (and possibly closer to $40m)

(vii) With the volatility in vanadium prices there's always that chance of prices suddenly running away - we saw it in 2018/19 and a repeat is more than possible with the speed of vrfb adoption that's happening. When it occurred last time Bushveld was a fraction of the size it is now operationally speaking and yet that spike saw a share price peak of 48p - what do you think it would reach this time if V suddenly rallied to $100/kg? Bushveld would be generating around $25m profit a month - breaking a pound is more than possible...

Yes time's have been hard but we're close to a turning point here and no matter how bad things have looked over the past year ~4.5p was very rarely breached. I think your friend should have another look and ask himself whether it's worth keeping an eye on a share that is unlikely to go lower but has the potential to do multiples if just a few factors come together.

Fortune hasn't lost anyone any money on here. I'm no Fortune worshipper and I believe the share price is where it because of poor shareholder engagement and communication and blame falls at the feet of the management but this is sentiment based not fundamentals - and sentiment is far easier to reverse than company fundamentals.

There has been no distressed asset sales, there's been no forced heavy dilution... there has been no terminal damage that prevents Bushveld from ever becoming a major vertically integrated vanadium business and every single holder that has stuck it out no matter their average should be back in profit in the months and years ahead.

Well we've been told numerous times it will be operating before H1 is out so that's 4 months and two weeks latest...

A couple of months sounds about right.

I imagine a lot of time, energy and resources has been given up to the FSS bid over the past few months.

Personally I think that’s quite understandable.

'I think Harland and Wolff is looking monumentally undervalued at the moment'

'The board becomes a better read over the weekend'

That was the kiss of death.

Afraid not, for the likes of HMHG we only follow logic if it gives us the conclusion we want. Obviously anyone genuine or just reasonably intelligent understands that whilst trends can persist for a long time they do in most cases reverse, otherwise one could have responded in the same way in 2019:

'Marc 5 years ago it was 4 pence now it’s 40 pence so extrapolating perhaps 400 pence ? DYOR.'

So HMHG you've listed a bunch of issues / downsides / risks and to that I say fair enough but the positives are:

2 of just four primary producing plants in the world
Record production this year despite intense load shedding and Kiln 3 refurb teething issues
Conservative guidance of 4350mtV for 2023 (Largo produced 5634mtV equ. and have a market cap of $402m)
Electrolyte plant operational within 5 months
25% ownership of a VRFB company estimated to be worth $70m.
Producing record amounts of V at a time of strong and increasing Vanadium prices, well above long term average.

Very simple question for you to answer - so what market cap should Bushveld Minerals be in your opinion?

And yet V prices remain buoyant and well above the long term average which is extremely positive and suggests vanadium for vrfbs are more than making up for it - just imagine what happens when steel demand recovers...

Whilst we appear not to be selling to China currently the price there is still important as it is likely the same / similar to the price in the rest of Asia, a market we do serve.

Bushveld pulled off that particular financing deal with Orion when the chips were really down with covid raging in 2020. And what happened to the share price when the financing uncertainty was eliminated? The share price doubled from 11.5p to 23p (and V was $23/kg in Europe!!!).

Funding *will* be sorted - the share price is ludicrous right now.

Just goes to show how some don’t bother to submit TR1s until they are prompted months later - same could be happening with a buyer here over the past few months.

No need to do any adjusting for the ‘80%’ as that is what is quoted in all the rns’ - hence cash costs for 2023 are $26.5kgV weighted across Vametco and Vanchem and current prices where we sell to are well above $40kgV now.

You’ve left out of tons of possibilities… what about
(I) HNW client distressed and needs the cash
(II) HNW client happy with returns in such climate and are moving the money into different assets (building a property portfolio)
(III) HNW client has died and holdings are being sold for the estate.
(IV) HNW client has committed to invest elsewhere

There’s loads of reasons why someone might sell that allow for this company still doing very well

They are highly unlikely to be going to zero and have had the opportunity to sell far more over the past week with the amount of volume so maybe that’s their lot?

Very much with Kaeren and James. There’s no way that the government approves this bid if Harl are then forced to immediately dilute their shareholders into oblivion to have any chance of fulfilling their contractual obligations.

This is scaremongering… as far as I can see the capital requirements to get this off the ground aren’t enormous, we are seeing £25m of work realised immediately and another £25m next year, we’ll over half of the direct investment from the yards is coming from third parties rather than Harl itself and they have explained how they are funding the other £32m. That is it, they’ll be good to go with that.