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https://twitter.com/mysteelglobal/status/1400014757982134279?s=21

I’m not sure why Bushveld would like this tweet about iron ore prices?

Bushveld has already spent about $1 million in preparation costs so once the button is pressed I don’t see it too far away.

Mogwhy, my sources tell me that is exactly what will happen and it could be quicker than many may think.

The site originally scoped was capable of 800 mwh of electrolyte but this has been reassessed and 1000 mwh is actually the top end.

Prince Nyati CEO of Lemur is speaking at the Junior Indaba which takes place on the 1st and 2nd June.

Why would he be speaking unless he had something to say?

Mogwhy, I agree wholeheartedly with this being the start of news flow for Bushveld Energy, especially as the electrolyte plant is falling under the production side. I also think that Q1 was never going to be pretty with over the third of the quarter having no production output. Today’s RNS is out of the way now, I expect things to look very good for the rest of 21 moving into 22 which will be incredible.

Shareholders have asked for separate updates and the company has responded. I see this as a positive step.

Jagadish, because it has to be dug up and processed. There are Titanium and Phosphate credits to increase the value.

Fizzy, you’re completely missing the point. Fortune IS Bushveld Minerals. Without him there isn’t a lot left. There is no team that can take over with the knowledge and experience required without significant delay to the plans in place.

You are being very naive.

Where will China get it’s iron ore from if not Australia?

It is easy to sit on the sidelines and criticise FM and MN for their strategy around Bushveld Energy and the so called first mover advantage. Personally, when BE was announced I saw it as a mainstream battery manufacturer and that it would be winning VRFB contracts years ago. Having thought about the strategy employed a bit further and the reasons why this isn’t the case it is now clear to me that BMN have been very clever.

With VRFBs becoming mainstream and in reality the only battery storage for grid scale applications where there isn’t a viable alternative like pumped hydro. Lithium cannot compete as there isn’t enough to go round with the massive increase in electric vehicles over the next couple of years.

Building the VRFB industry and building mining and manufacturing capacity has been BMNs focus. It takes years to build mines and processing capacity, Bushveld are well on their way to 8,400 and probably 10,000 in the next couple of years. I believe that Mokopane will come on stream by 2025 and will add another 10,000 mtV. This capacity is required to keep the price of V in a range that makes VRFB commercially attractive.

Imagine selling 20,000 mtV a year at $40 a kilo. That is $800,000,000 per year of revenue without anything else we own. Bushveld won’t get all of that as we don’t own all of Vametco or Mokopane but make no mistake Fortune and co are building a giant.

https://twitter.com/thinkvrb/status/1388190377547546626?s=21

The tweet regarding Floyd81’s post from VRB Energy is interesting and worth a look.

And there was much discussion of the benefits of vanadium over lithium for stationary storage, particularly because of the deadly fire that destroyed a 25MWh LFP project in Beijing just prior to the conference.

https://www.pv-magazine.com/2021/04/21/two-firefighters-killed-and-one-missing-after-beijing-battery-blaze/

Another truly frightening battery fire.

Both sells

Faramog, type MUST, it won’t appear on the drop down but hit search and it will come up

Two significant VRFB manufacturers delivered back to the market with off-take deals in place, substantial ownership retained and still a profit to be booked at the end.

It's not always easy to follow Bushveld Minerals business structure and no doubt I have lost one or two along the way as well. None of that, however, can detract from the sheer quality of these deals or the effects they will bring to the business in time.

Note - This article represents the opinion and research of the author only and the author currently holds a position in one or more of the stocks mentioned. Nothing shared in this article is to be deemed financial advice. Where possible all facts have been checked and references provided, however, it is the responsibility of the reader to check all details for themselves before making any financial decisions. Please also refer to the disclaimer policy

Meaning that in total, BMN sold 2.82% of their full 7.15% holding for $5.7m. If we then deduct the above 1.39m shares from our remaining total of 2.55m shares, we would have c. 1.16m remaining to be sold.

Value-wise we have $3.1m still to find ($8.8m - $5.7m). At $1.35 exchange once more that equates to an average sale price of £1.98 a share.

The majority of the remaining sales (c. 970,000 shares) were sold between 8th January and 24th March this year. The first 6 weeks of that period saw a share price of over £2 a share. However, for the purpose of this exercise, I will take the lowest possible price of c. £1.40 a share, which was witnessed in March.

At that price, BMN would have to have sold c. 1.64m more shares in order to have reached their $3.1m remaining goal. If so, then this would be c. 480,000 more shares than the above 1.16m minimum to be sold. That equates to around 0.55% more of their holding.

Therefore, realistically the lowest holding that BMN could have had left in Invinity on 1st April 2021 is c. 2.5%. At today's prices, that 2.5% is worth around $4m.

Conclusion

What does all that complicated but hopefully well-explained calculation deliver?

BMN started with an original $5m investment in the Avalon/Redt Energy merger.

Whilst it's a rough figure, it is clear that BMN has c. $4m of remaining equity either still sitting in Invinity or in their bank account.

They have also sold $8.8m in shares in Invinity. Therefore, the total initial $5m has delivered the business around $7.8m in profit to date. Give or take a few dollars.

The total costs of securing Enerox and investing in its future has likely cost Bushveld Energy (BMN) also around $8.8m. Therefore, as things stand it has cost Bushveld Energy just $1m to achieve the total Enerox transaction.

However, when we then include the assumed (minimum) 65% value that BMN receives from the Mustang investment ($4.9M), then we have Bushveld Energy coming out with a c. $3.9m profit on their original $5m commitment.

What that means is that their 25.25% ownership in a fully-funded Enerox that has plans to expand to 30MW within the next 18 months or so. was free. That any remaining ownership from their investment in Invinity (if still held), who they are supporting through vanadium rental deals is also free.

Whilst achieving all of that, BMN's (so not Bushveld Energy) support has also secured them a guaranteed first refusal right on any vanadium/electrolyte that these two companies may demand. Yes, the deal with Invinity runs out next year but with a vanadium rental partnership (VERL) now in its place, their access to Invinity projects remains fully intact.

The combination of the two transactions is a wonderful piece of business and yet another showcase for the hard work and talent that this management team brings to the table.

To this, we must add their share of the initial 2.6m euros that was paid to Enerox to secure the first 24.9% of Enerox. Why? because as we've established already, the further 65.1% was mainly about future investment in the business, which is now more than covered by this Mustang deal.

EHL is split 50/50 so BMN's share of said 2.6m euros should be 1.3m euros maximum ($1.6m) plus any transaction-related costs. However, that would assume that BMN are covering the full costs of VRFB H and our scenario currently says they are down for c. 65%.

Therefore, their share of costs would be c. $1.05m + transaction costs. Add this to the above $2.8m and we have BMN looking to find c. $3.85m + transaction costs.

Now let's bring in Invinity.

In the same 1st April 2021 RNS, BMN had this to say,

"Bushveld Energy has monetised a portion of its Invinity holding and received approximately US$8.8 million. As at the last practicable date, being 31 March 2021, Bushveld Energy's Invinity holding was less than three per cent."

In order to enable Avalon and RedT Energy to merge, BMN effectively lent the 2 companies $5m, which was later transferred into Invinity shares.

Rather conveniently (not planned I assure you), BMN's total $8.8m of sales (again transaction costs noted) in Invinity shares, exactly matches the above remaining costs for Enerox + that initial $5m investment into Avalon.

The holdings RNS from BMN dated 1st April 2021 was the last update on their holding in Invinity, so their exact remaining share is difficult to pin down.

Here are their IES holdings updates,

4th Jan 2021 7.15% reduced to 6.93% - Threshold crossed 23rd December.
11th Jan 2021 6.93% reduced to 5.71% - Threshold crossed 8th January
25th Mar 2021 5.66% reduced to 4.59% - Threshold crossed 24th March
30th Mar 2021 4.59% reduced to 3.92% - Threshold crossed 29th March
1st Apr 2021 3.92% reduced to below 3% - Threshold crossed 31st March

Here now is Invinity Systems own 6-month share price chart with volume traded.

It is not easy to pin down the exact time periods but some of the transaction periods are so close together that a picture can begin to be built up.

Transaction 2 at 1.22% (1.059m shares) sold took place between c. 24th December 2020 and 8th January. We know this because of the threshold date for transaction 1.

At c. ave. 210p a share during that period BMN achieved c. $3.1m (at $1.40 per pound exchange rate). That then left a minimum of 2.94% to be sold in order for BMN to hold below 3% (2.99%). That equates to 2.55m shares.

Transaction 3 places a backstop on transaction 4 and 5 dates. Those 2 transactions saw a minimum of 1.6% (1.39m shares) of Invinity shares sold by BMN between 25th March and 31st March 2021.

The average share price in that period was c. £1.40 a share. That equates to c. $2.6m (at a slightly lower dollar exchange rate of $1.35 per pound).

A reminder. EHL acquired 90% of Enerox for c. $3.2m in August 2020 and Bushveld Energy and their VRFB H partners just sold 11.05% for $7.5m, valuing Enerox as a whole at c. $68m.

By securing this funding, the founders of VRFB H have secured half of their total committed investment capital for Enerox ($15m) and more than delivered on the contracted 3.7m euros ($4.2m) set out in that 3rd August 2020 RNS.

All of which led to the following statement by BMN in today's (27th April 2021) RNS,

" The Company also announces the completion of the investment by VRFB-H into the 100 per cent holding company for Enerox, Enerox Holdings Limited ("EHL")."

It is open for debate as to who owns the remaining 27.4% of VRFB H. It isn't Bushveld Energy (BMN) because they have already declared their final position. What we do know is its BMN announcing this deal and it is they who are taking on the risk of Mustang failing to achieve readmission in time by offering BMN shares as collateral. So it is reasonable to assume that they (and their shareholders) are being handsomely rewarded for this risk. It's therefore not unreasonable to assume that if the 27.4% truly does stay with another party that the spoils of this deal will be shared (at the very least) pro rata.

That would place BMN's 50.5% share of a total 77.9% (50.5% + 27.4%) at c. 65%.

65% of $7.5m = $4.9m

If indeed fair, then today's deal has delivered Bushveld Energy two-thirds of their total $7.5m capital commitment to Enerox. When placed alongside the $30m full investment, Enerox reportedly has enough firepower to drive it to 30MW of capacity in 2022, which when supported by equivalent contracts should deliver an Enerox that is worth considerably more than the $68m we see today.

One could make an argument that Bushveld Energy is receiving all of the $7.5m paid by Mustang because nowhere does it say that other parties are receiving anything. Today's RNS is clear,

"("Bushveld Minerals"), is pleased to announce an investment by Mustang Energy Plc ("Mustang"; "LON: MUST"), into VRFB Holdings Limited ("VRFB-H") to acquire an indirect interest of 11.05 per cent in Enerox GmbH ("Enerox")."

That the investment is into VRFB H is a fact. That Bushveld Energy will hold 50.5% of VRFB H is also a fact. Ownership of the remaining percentages immediately prior to their sale is more than open to debate. If the plan was to sell the remaining elements or part of and that was already in play, then BMN need not declare its status until that deal is completed. This is particularly true when said deal is announced less than 4 weeks later and so was clearly already in play.

However, until confirmed otherwise, I will stick with the above first result and that $4.9m.

If indeed true then Bushveld Energy needs only find another $2.6m to cover all of their promised $7.5m investment in Enerox.

Posted in full as people need to read this.

BMN Deal Making on Another Level

On further analysis, the deal announced today by Bushveld Minerals today with Mustang, when coupled with their Invinity Systems deal is starting to look like an enormously clever piece of business indeed.

When considering everything from this point forwards, one must appreciate that we have two main entities here.

Enerox Holding Ltd (EHL) owns 100% of Enerox. EHL is an investment vehicle formed by a consortium of investors, including Bushveld Energy Limited.

VRFB Holdings Limited ("VRFB-H") is majority-owned by BMN (Bushveld Energy) at 50.5% ownership and as a company holds a 50 per cent interest in EHL.

It's important to be clear on the key difference as we now delve deeper into the detail.

First, let us start with the terms for the purchase of Enerox. Here's the exert from the RNS dated 3rd August 2020.

BMN and their investment consortium (EHL) invested a total of 6.3m euros (+ nominal fee) for a 90% stake in Enerox with the seller retaining 10%. By the close of 2020, BMN was reporting that Enerox Holdings Ltd (EHL) owned 100% of Enerox. Logic says that the further 10% ownership was acquired by a party outside of BMN control because its purchase was not reported at the time.

3.7m euros of the said cost was designated as being a "shareholder loan facility" and it was,

"designed to provide working capital and funds for capital expenditure to enable Enerox to reach sustainable commercial production."

Terms at the time (3rd August 2020) stated,

"Should EHL not have funded Enerox an aggregate of €3.7 million by 31 December 2021."

To be clear, that's the end of this year not last year when the transaction took place.

So in reality the consortium acquired 90% in Enerox for c. 2.6m euros ($3.2m) because the 3.7m euro ($4.5m) element forms part of the total $30m investment announced by BMN on 1st April 2021.

From that same 1st April 2021 RNS,

"Bushveld Energy has an indirect interest in Enerox of 25.25 per cent, through VRFB Holdings Limited ("VRFB H"), which owns 50 per cent interest in EHL."

"Bushveld will contribute its share of the investment, being US$7.5 million comprising US$5 million paid on 31 March 2021 and US$2.5 million payable during the month of April 2021."

So $5m came out of BMN's own pocket (more on that later) with $2.5m still to come in April.

Now, let us jump forward to 27th April and the deal with Mustang. They are now acquiring a 22.10% share in VRFB H, which gives them an 11.05% share in EHL, which owns 100% of Enerox. Nice and straightforward as usual.

That 22.10% share values VRFB H at c. $34m. Meaning that Bushveld Energy's share at 50.5% ownership is valued at c. $17m.

https://www.bbnbigbitenow.com/post/bmn-deal-making-on-another-level

If anyone can read this article by BBN and not be amazed by he deal making done by FM and team they need their heads testing.

James, it is an RTO because the value of their investment in Enerox is larger than the current MCAP of MUST.

https://www.londonstockexchange.com/news-article/BMN/update-on-enerox-gmbh-investment/14951968

The worlds worst kept secret is out. Looks to me like BMN is a far better investment than MUST due to it’s depressed share price.

For me this is another example of a poorly written RNS. Put the complicated legal stuff at the bottom and put a lot more at the top about what an ‘energy storage solutions provider’ means.