Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Did we have to pay more for Vanchem alone than the current market cap?...... to a distressed seller and as the only people on earth who had some ore to actually process there.
I wonder what the MCap would've been today if we'd picked up a few less bargain plants/VRFB producers and stayed a much smaller, less valuable business. Multiples?
One of the key messages from BBN's great article yesterday was that the increased production costs will be short-lived.
I'm assuming refurbishment costs are accounted for as CAPEX and reflected in production costs over a long period of time, not just in one lump the year they were incurred? Am I right in my understanding that the artificially high unit production cost this year is just a reflection that there's increased cost without any associated increase in production in the period whilst the work actually takes place? i.e. in an accounting period where 100% of the refurbishment costs are fairly assessed against 100% of the increased production they brought we can expect per mTV production costs to be significantly reduced
We're not involved at the project level with any of these presumably large scale renewables projects. Fingers crossed we may ultimately end up involved somewhere on the battery supply side but there wont be anything to firmly announce on that today, just which projects have won the bid.
The BESS tender proper is another story and hopefully we are involved as a named party in some winning projects there
I'm personally not expecting any news relating to Bushveld involvement today even if some of the winning projects are intending to use VRFB. Similar to OEM provider for the solar panels, racking, wind turbine manufacturer etc until the supply contracts are actually signed then what is there to announce?
Which part do you think could be 'hype' vauch? The tonnage of V to be mined or the sale price?
That's good for us if it is indeed all tied to the Orion funding and Duferco have agreed to wait until that comes through before accepting their 50-50 cash and shares (given it looks like they had an option to convert weeks ago at a lower share price)
Would certainly be good first sign for a hopefully long-term investor relationship going forward
Thanks Jimbo. So it appears as of Sep 30th they'd already agreed to convert at least the first $6.5M into shares but not clear if the price was set on that date.
Have the funds from Orion cleared yet? Maybe we're waiting for those and early repayment and conversion will be on the same date (with VWAP calculated accordingly)
If Sep 30 is the date that's only a month before the first anniversary (Nov 7th) so don't see how it would be beneficial to go early in order save only 1 months interest vs what the share price could've done in the same time in terms of increasing the VWAP and reducing dilution
On that basis, is it a foregone conclusion that they will take shares? If I'm understanding correctly if they sit on their hands for another 12 months then they will just get the cash?
·; An additional payment of US$23.0 million to be satisfied through the issue on Transaction Closure of Bushveld Minerals unsecured convertible loan notes ("Loan Notes") with the following repayment, redemption and conversion terms (in addition to customary covenants, warranties and acceleration provisions):
o Interest at a coupon of 5% per annum payable annually in arrears or on conversion or redemption;
o Repayable in cash after the second anniversary of Transaction Closure, plus any accrued interest;
o Convertible at the holder's option in two tranches of up to US$11.5 million each, after the first and second anniversary of Transaction Closure respectively, at a 5% discount to the prevailing 10-day volume weighted average Bushveld Minerals share price leading up to conversion;
I understood it a little differently SIPPmeister. That they can choose to convert at any time after the first anniversary and the price is based on the VWAP in the 10 days prior to that date. I don't believe any price was 'locked in' on the first anniversary date if they haven't notified they are choosing to take shares. I think the default position if they choose not to convert is we pay cash + interest after the second anniversary.
..... today.
Then 15p by xmas.
Then 30p by January.
All seems a bit random and not particularly helpful.
Just my $0.02 but I think encouraging other investors to buy immediately on the basis of specific but baseless short-term price targets is pretty much the definition of a ramp.
Source is 12 months old now (Navigant 2019) but image in link below ranks the VRFB players and shows that we have linked up with the industry leader in Enerox (Cell cube). VionX some way down the pack
https://www.vanadiumcorp.com/news/industry/flow-batteries-leaders-starting-to-live-up-to-promise-says-navigant/
I can't get on the website as newly registered domains tend to be blocked in work.
Alfa - are VionX a name you've come across much before? Any thoughts on how they stack up vs Enerox, Invinity & the wider industry in terms of product, deployments, pipeline etc?
Part of the point of these partnerships is to insulate the VRFB OEM from V price spikes like we have seen in the past. I don't see how that works in practice unless we're prepared to offer upfront discounts during high price periods.
I agree we can't know the future value of the contained V so it's very unlikely the contracts rely on it to make their return. If we fast fast forward 20-25 years to the end of a rental contract.... At that point if the electrolyte somehow decided to spontaneously combust (think Lithium!) then VERL wouldn't mind too much as they'd already made their returns. I don't understand why at that point I (as BMN, one of only a few processors in the world who can even do anything with it, who enabled the whole contract to even exist in the first place) should be paying market rate to reacquire that V when 50% of that goes straight to Invinity.
Appreciate that Faramog, I guess it's that final 50/50 split in your last bullet point I'm struggling with.
I guess it's pretty unique to be leasing something that doesn't depreciate in value but I don't see the risk you mention. The returns for the underwriter will be contracted with the customer over the term? They're guaranteed those returns.
Surely it works both ways, we're not expecting them to pay fair market rate upfront for the V so not unreasonable to expect favourable terms on the reclaim, especially from a company we part own on an asset which owes them nothing?
If, on the other hand, the residual value for the V is baked into the rental contract with the battery customer (so returns for VERL are made up of end user lease payments PLUS a fair market rate from BMN to buy the stuff back) then the rental product must be an exceptionally cheap route to getting a VRFB.
In a recent interview Fortune talked about the breakeven price we could afford to pay to reacquire the V contained in Electrolyte at the end of a rental contract (when compared to product from the mining operation).
Assuming our share in the electrolyte rental SPV is 50/50 with Invinity then wouldn't this just be giving away a slice of value? If VERL can find a home for the electrolyte in another contract then great, but I'm not understanding why BMN should be paying up to the breakeven point to reacquire the electrolyte when the battery is decommissioned? VERL will have already made their returns on the lease payments.
Sounds to me like the kind of thing Fortune would do: Buy Enerox for a nominal fee, prop it up to win a company making contract with ESKOM (Vanadium into the battery for free/at cost?) now sell it on for a significant fee because owning and running a battery manufacturer isn't the plan going forward?
Reading through the RNS's I can only see reference to 'intentions' regarding ownership of EHL and retaining minority interest. Is it possible that as things stand today BE retain 100% of EHL and will only sell down to carry forward a minority interest once some value has been created e.g. by a massive ESKOM contract win?
How much do we anticipate it might cost to buy out our partners in EHL? I thought the 2nd tranche of 65.1% of Enerox had been acquired for a 'nominal fee' but an agreement to fund the operation going forward (to the tune of $3M odd). If we wanted to go it alone could we not have chosen to do so without any extra upfront outlay?