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Ferro Vanadium 80% FOB (China) US$28.5/kg vs US$28.5/kg - Ferro-vanadium prices rose 0.7% to the year end to $22.34-22.86/kg in Western Europe (Fastmarkets MB)
• Vanadium pentoxide prices also 3.8% to 4.8-5.85/lb in Rotterdam.
• Vanadium prices are expected to rise this year on the assumption that China will more fully enforce regulations on vanadium grades in structural steel for construction.
• Construction of new Vanadium Redox Flow Batteries should raise demand for vanadium electrolyte this year as power utilities work to balance new renewable energy supplies with other power sources.
• Prices for ferro-vanadium and vanadium pentoxide remain stable for now.
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Vanadium company news - The U.S. energy storage market is expected to grow by a factor of 12 in the next five years. Gates, Bezos bet on flow battery technology.

https://seekingalpha.com/article/4314797-vanadium-miners-news-for-month-of-december-2019

In terms of prices, Meyer said vanadium prices are down, but definitely not out. Prices are expected to recover sharply in the next few months as buying returns to the market.
SP Angel forecasts that VRFB demand in Southern Africa alone could consume over 5 percent of global vanadium production over the next few years, creating significant new demand in a market where supply is relatively consistent.
“If this trend is repeated in the US, China and Europe, then we can see new demand for vanadium easily outstripping supply in future years, with grid developers queuing to secure available vanadium electrolyte supply,” Meyer added.

THIS BLOKE CLEARLY HAS NOT HEARD OF BUSHVELD !

For investors new to the space, VanadiumCorp’s Bakker suggested researching which companies are best positioned to supply the vanadium required for the battery market to fully commercialize.
“(Investors) will likely find there are no companies commercially developing this full supply chain, and the only two primary vanadium producers serve the needs of the predominant market: the steel and alloy market,” he said. “Vanadium makes the best batteries; however, no one has solved the paradox by integrating resources, green process technology and battery technology combined.”
https://www.oilandgas360.com/vanadium-outlook-2020-is-vanadium-due-for-a-comeback/

John Meyer talks about Bushveld’s new strategy and VFRB batteries in the final 1.5 mins of this video:

https://m.youtube.com/watch?feature=youtu.be&v=V9sDIoD3IHg

Yeah this is new and I expect an RNS for this imminently

Alongside Vaneck running out of shares to sell, I genuinely think Monday presents itself as the perfect time to buy I’ve seen in a good while!

Ninvestor,

Great post, and yes a rebrand to "Bushveld" or "Bushveld Vanadium" is such a good idea because, actually, upon reflection, the 'Minerals' (and even 'Energy') sounds ever so AIM!

Bushveld (BVD) would be my preference.

* then, once they've run out shares to sell, we see a significant correction.

Not sure what happened there. I blame my phone!

Yes completely agree.

We've had this sort of thing happen in the past where a large ii sells off their stake and moving the share price in a way we cannot understand and then, once they've run out shares to sell, we can a significant correction.

From April 2017 to March 2018 Bushveld made massive progress yet the price remained circa 8p for the entire 11 month duration. Then once whoever that was through, the share price went up well over 100%, to 19p+, in the weeks that followed.

So yes, if Vaneck have sold their final tranch of shares today and they were reason for the recent fall beneath 20p, the share price would increase considerably over the next few weeks.

Excuse my ignorance here but what are you referring to? (what does BESS stand for?)

*vertical integration strategy

Another thought I've had about the vanadium prices is that it is perhaps a good thing they've collapsed because the sky high value of vanadium would have priced out / put off a lot of investment and activity in the VRFB space. i.e. it could have been pricing vanadium out of usage for all except for those who must use vanadium.

This could help explain why we've suddenly seen so much more activity, deal-making, and progress being made in the VRFB sphere now that prices have come down to a more reasonable level.

Point being that the vanadium price fall is beneficial for buyers but also vanadium sellers like Bushveld because it is expanding the pool of buyers and helping the VRFB market to develop.

And then, one day, when the VRFB takes off and demand is much higher, vanadium prices will increase signficantly, and large primary producers like Bushveld will hugely benefit. By which point Bushveld will be producing more than ever.

Ultimately I feel Bushveld's share price has been closely linked to vanadium prices in the last 12-18 months. Why? Because, unlike many other commodities, you can't invest in vanadium directly, so this was the way many investors (or speculators even!) got in on the vanadium price spike last year, and why many have chosen to sell out this year.

Do I think that will continue? Not at all. I think over time as vanadium demand comes from more sources than just steel manufacturers, and once the market sees Bushveld as a consistently profitable company, and as the BOD's vertical integral strategy becomes clear, the market will view Bushveld as more than just a derivative of vanadium commodity prices.

This will take time.

For many years the market saw Bushveld as just another iron mining company. It took years for them to realise they were wrong to think that.

Now they're view Bushveld as a vanadium producing mining company ... but they're not seeing the bigger picture about the company's profitability and strategy, nor do they seem to understand how exciting vanadium's future is.

Yet.

Can we expect an RNS to confirm the partial acquisition of Enerox then?

https://www.cellcubeenergystorage.com/enerox-1

Amazing news!!!

The global vanadium redox flow batteries market size is rising with a fast-paced growth over the forecast period reaching USD 1.11 billion by 2025, on account of their longer life span (up to 25 years), and are higher suitability among utility scale and industrial applications.

The research report on ‘global vanadium redox battery market’ studies the current status and forecast of the market at local as well as global level, and classifies the global vanadium redox batteries market based on market value and volume. The report also includes market segmentation on the basis of application, type, manufacturers, and geographical regions. The global vanadium redox flow batteries (VRFB’s) market report focuses on the leading manufacturers in Europe, North America, India, China, Southeast Asia, Japan and other regions.

The global vanadium redox battery market report provides an estimation of the vanadium redox battery market comprising technologies, market drivers, key trends, standardization, challenges, deployment models, regulatory landscape, opportunities, operator case studies, value chain, future roadmap, ecosystem player details and strategies.

Growing power backup requirement, and increasing demand from the automotive industry, specifically in electric vehicles is likely to provide major opportunities for vanadium redox battery market growth across the globe. Growing urbanization, shifting lifestyle, growing digitization trends, sales growth of several electronic devices such as electronic toys, laptops, mobiles, etc. are expected to contribute to vanadium redox battery market growth over the forecast period. The rising utilization of vanadium redox batteries in wide-ranging applications such as telecom industry and goods engineering will further increase their significance between global end-users. Several manufacturers coming with a number of innovative designs for electronic devices, using vanadium redox batteries are expected to develop as a key trend in the global vanadium redox battery market.

https://www.globenewswire.com/news-release/2019/04/09/1799414/0/en/Vanadium-Redox-Flow-Battery-Market-Will-Grow-at-59-7-CAGR-to-Hit-1-11-Billion-by-2025-Adroit-Market-Research.html

Not sure if this has been posted but the global redox flow battery is expected to grow over 100% over the next few years. And, as said in one of the links below, "while there are seven main types of flow batteries in mass production or development, according to QY Research, vanadium flow batteries lead the market with a 70% share."

Personally feel this is underestimates what will happen.

I broke insurance for many Australian companies in the energy space, and they're all talking about how rapidly they are switching from traditional energy sources (like coal especially) to renewable energy sources. And, as that happens, the demand for redox flow batteries will grow hugely.

Also it seems as though China are total believers in vanadium. The Vanadium RFB revolution appears to have begun already over there and, by demonstrating to the world what vanadium redox flow battery storage can do, they will bring about a Vanadium RRB revolution in the USA and the rest of the world.

https://electrek.co/2017/12/21/worlds-largest-battery-200mw-800mwh-vanadium-flow-battery-rongke-power/
https://www.energy-storage.news/news/chinas-biggest-flow-battery-project-so-far-is-underway-with-hundreds-more-m

https://www.utilitydive.com/news/global-redox-flow-battery-market-set-to-reach-to-370m-by-2025-qy-research/561279/

Also, and this should go without saying, Bushveld is likely to have the best profit margin in the vanadium market, because their production costs are so low already, and they seem to consistently find new ways to reduce them even further.

It's widely accepted that Vanadium rocketed last year due to the China implementing new rebar standards as of November 2018, and it fell when those standards were not enforced much / at all, ironically because the Vanadium price was considered too high by the time they came into effect.

I've since seen reports that steel manufacturers have been given until the second half of 2019 to meet the new rebar standards, and many of them went for nobium instead of vanadium because it was a cheaper substitute.

However it was cheaper for a reason, as I'm sure they're now discovering.

As you can see in this article here (https://www.vanadiumprice.com/vanadium-and-niobium-substitute-date-april-26-2019/), "nobium rebar has to be raised to a higher temperature and be cooled under much more stringent conditions so as to maintain metal quality." It also more brittle than vanadium so would need replacing more frequently. All of which comes at a cost.

Clearly these steel manufacturers bought nobium knowing it is inferior because it was once significantly cheaper than vanadium. That is no longer the case, partly because the supply of nobium is incredibly limited.

Consequently I feel as though those nobium buyers are highly to be switching to vanadium in the near future, which will increase the value of vanadium from the low point it currently sits at now.

Obviously the other big factor in play is that Chinese production of vanadium has increased significantly, much more abruptly than anyone predicted 12-13 months ago.

However it is not clear what quality their vanadium will be considering Chinese rebar samples have previously failed British compliance tests in the past. (https://www.constructionnews.co.uk/news/knowledge-news/chinese-rebar-samples-fail-independent-british-compliance-tests-19-08-2014/)

And, much more significantly, the demand for vanadium should increase exponentially in the medium term once the vanadium redox battery (VRB) market develops. Vanadium is obvs a superior metal to its direct competitor in this space (lithium), and my feeling is that the market will go crazy for this once they get a sniff that we're reaching the point of VRB commercialisation.

In summary, I feel vanadium prices are at their lowest point at the moment, and will recover from here over the next 12 months, and then eventually rocket to new highs in the 2-3 years thereafter.

at these prices.

Doubt there is any other company out there with a market cap at such a low multiple of their revenue/profits as we have here with Bushveld.

Rev: $130m (33% down from $192m)
Profit before Tax: $50m (42% down from $86.6m)

Obviously much worse than last year. Why? Primarily because Vanadium prices spiked in 2018 H2 due to the expectation that the Chinese would properly enforce the Rebar regulations... which they have so far failed to do! Made worse by the Chinese abruptly increasing their own Vanadium production.

However a company generating profits of $50m annually which has increased its asset base MASSIVELY with the Vanchem acquisition and is expecting production to increase in the years to come should not have a market capitalisation roughly 4 times their annual profit.

Especially when the Rebar regulations should be better enforced going forward

AND - much more importantly - the Vanadium Redox battery market will be a complete gamechanger in the years to come!

Actually I miscalculated the current EV. It is actually $274m (incl cost of Vanchem acquisition) at the share price of 19.25p. Meaning the current EV/EBIT is 6.2.

Makes no real difference to the point I was making about how underpriced this is but thought wanted to correct myself.

FUNDAMENTAL ANALYSIS

Based on production increasing 70%, as follows:

2018 Vanadium Production = 2,560 MT (Vametco only)
2020 Vanadium Production = 3,400 MT (Vametco only) + 960 (Vanchem) = 4,360 MT total

... and based on the assumption that vanadium prices that are 30% of the value they were a year continuing forever...

... and disregarding all the progress and developments to date and in the near future...

... and disregarding how Vametco's production will continue to increase to 4,200MTVpa, and Vanchem's production will be higher than 960MTVpa (as it ramps up towards that 4,200MTVpa level it is capable of)...

We can do the following calculation

2020 EBIT = (2018 EARNINGS Before Tax ($86,000,000) + 70% production = $147.2m (at same prices) x 30% value = $44.2m
2020 EV = $216m it is currently + $68m for Vanchem acquisition = $284m

2020 EV/EBIT = $284 / $44.2m = 6.425

An EV/EBIT of anything less than 10.00 is considered undervalued. Especially for a company that's cash rich and profitable.

So this is very undervalued at present.

And that’s based on some unfairly harsh assumptions.

Is 18-19p btw

Fundamental analysis coming soon...