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Pleased to see that they know Vanadium beats Lithium for stationary energy storage.

One major positive from 2020 is that this message has really got out there in a way we haven't seen in prior years. Honestly never seen so much excitement for Vanadium, and that's only going to continue to snowball in 2021 of course : )

Sure there'll be loads of articles about Africa's largest utility company choosing to use VRFB technology once the news is announced imminently !

"We therefore remain optimistic that prices will recover from current levels to longerterm ‘normalised’ prices that will exceed historic averages owing to this marked structural change in the market that we believe has only been temporarily
interrupted. Historically, periods of price weakness after preceding peaks have tended to make way for more settled periods of pricing at levels higher than the previous ‘normalised’ period (Figure 7).

Figure 7: Historically, vanadium price spikes have been followed by periods of
lower volatility but at a higher than pre-spike mean pricing level

[ Nice graph here on page 12 of the pdf to illustrate how this is heading to $40kgV+ ]

We use a long-term pricing assumption of US$40/kg (from 2022) for equity valuation purposes. This compares with the ten-year average market price of just under US$35/kg (which we note current market prices still lag).

We consider this a relatively conservative assumption and see potential for further periods of much higher pricing, particularly if co-production capacity is curbed. "

Long story short, we're still recovering from a highly unusual slump in V prices, but the recovery will clearly continue, driving V prices to $40kgV on average at the minimum. [And, for those who do not know, BMN's production costs are $18kgV and falling; and they sell much of their product for a premium to the prevailing V commodity prices at the time; so the profit margins will be superb]

Also, as mentioned yesterday, the world will become increasingly reliant on the small number of vanadium producers such as BMN over the next year or two, and beyond.

All of which is to say that the fundamentals here, which are already incredibly strong, will become EVEN more compelling over 2021 and 2022 even if:

(1) Production were not to increase. Except it has already. 37% up on an annualised basis, as confirmed in the latest Quarterly update, and clearly going to rise 30-50% in the year ahead now we have the Orion Financing.

(2) the Eskom news does not material. Except it will, and we can expect to see that news arrive over the next few WEEKS!

TLDR: Regarldess of there being a slight pause in V commodity price rises (probably because of the time of year!), this is clearly is a CONVICTION BUY.

The sort of share you invest into early and make a life-changing amount from over the next year or two.

DYOR & GLA

Putting the daily V price movements to one side, the prospects for Vanadium prices overall could not be stronger in the short-to-medium term.

"While it is clearly challenging to predict very near-term commodity pricing trends
given the ongoing uncertainty of the pandemic’s impact on global industrial
manufacturing and trade, we believe that the factors behind vanadium’s slump last
year should continue to reverse as global economic activity recovers.
On the demand side of the equation, there is now little incentive for FeNb
substitution, and we note that the niobium market is even more concentrated than
the vanadium market (with one mine accounting for c80% of supply), limiting its
appeal as a long-term strengthening agent feedstock for non-specialist steels.
Moreover, we believe Chinese rebar regulations will be increasingly enforced if
builders are to meet safety expectations, driving up specific vanadium consumption
rates in China closer to levels prevalent in developed economies and placing further
strain on its domestic supply sources.
This is against a backdrop of general rising vanadium demand from China, supported
most recently by a cUS$500bn infrastructure stimulus programme (which perhaps is
driving the current vanadium pricing disparity between China and the rest of the
world – Bushveld is seeking to capitalise on this by directing more of its sales to
China, which now accounts for almost one-fifth of its volumes).

And VRFBs look set to increasingly grow market share in the stationary energystorage space (itself rapidly growing in importance globally), the technology
substantially more commercially viable at today’s vanadium prices compared with
the peaks of 2018.
On the supply side, the long-term outlook looks to be one of increasing market
tightness, notwithstanding last year’s increase in co-product supply. We believe
there is very limited scope for co producers to further grow supply (even at higher
steel or vanadium prices), with magnetite iron-ore steel operations at or near full
capacity and increasingly stringent environmental restrictions in China inhibiting
their ability to expand. The general trend in China’s steel industry (historically the
dominant co-product vanadium supplier) remains one of increasing reliance on
imported high-grade haematite iron ore, which is non-vanadium bearing.

High-cost stone-coal vanadium production (historically a swing source of global
supply) requires considerably higher pricing levels to be viable, as do greenfield
primary magnetite projects if they are to attract development finance. In our view
that leaves Bushveld – holder of substantial primary vanadium resources and latent
processing capacity – as one of the very few potential sources of new supply over
the coming years.

We therefore remain optimistic that ..."

http://www.bushveldminerals.com/wp-content/uploads/2020/12/Bushveld-Minerals-%E2%80%93-Innovative-financing-reignites-growth-drive_0

Not sure if anyone spoke about this already but that’s a very large buy that’s been reported late in the day.

I’m expecting a blue open tomorrow!

According to my back of (probably inaccurate) calculations, it looks to me as though revenues will increase this year to something like $2.75bn vs $2.26bn last year; and profits will rise to something like $860m vs $570m (about 50% up).

All of which leads me to think this could rise to 800-100p if the delisting threat were to disappear.

Does this match up with other people's calculations, or have I made a mistake?

And, as a separate question, am I being naive to think this will re-rate in a normal way given how the market will not forget this hostile takeover attempt?

Will have a ponder on this myself but would be good to hear others views

Also it's curious to see that RWC (who have already come out as being anti-takover) have increased their stake in the company as well, with a recent purchase at 655p.

BlackRock have bought almost £75,000 of KAZ shares @ 655p ish as well.

All of which suggests that they're betting on the takeover failing and the share price rising high thereafter ...

Thanks for the responses - that's much appreciated. 75% is the important figure to focus on then.

Or actually, according to that FT article, it would only take 12% of shareholders to reject the takeover for it not to go through.

"Because of the deal’s current structure, traders reckon it would only take a small group of minority shareholders with a collective holding of about 12 per cent to scupper the buyout — assuming a 75 per cent turnout at a special meeting scheduled for December."

It's also clear from the article that two large shareholders with a combined 6.9% of the shares will reject the deal. You therefore only need 5.1% of the remaining 43.1% to vote against the deal and it will not come to pass!

Or to put it another way, do you think at least 1 in 8 of the remaining shareholders will vote against the deal? When Copper commodity prices have risen considerably, and therefore KAZ's profits will have risen significantly, and shareholders are able to sell for higher than the offer price of 640p already, I cannot see this de-listing.

The question then becomes: What happens next?

Rastuss - you clearly have a v negative experience of the BOD but the idea of them working against their own interests doesn't make sense to me. If the delisting doesn't occur, they will still want to make as much money as possible. I cannot see why they would deliberately sabotage their own investment. Especially when the motivation for delisting was in fact seemingly due to being frustrated at being undervalued for so long, and the share price would rise considerably in the event of the threat of delisting going away !

Furthermore, the Financial Results will be there in black and white, and will read very well given that copper commodity prices are up and will continue to rise. That's something they cannot hide even if they wished to. Unless of course they were to deliberately stop selling copper during the copper commodity boom we're seeing - but there's no sense in that!

So my final questions are:

1) What's the timeframe for this takeover? i.e. when will we know when it has failed

2) What do we expect the share price to rise when it does? (this is something I need to form a view on myself)

All the best,
Libero

HaleSpur,

Thanks for sharing that - it reads very well, and actually more bullishly then the price target suggests (they later explain they expected 46p but then discounted it heavily to get to a very conservative figure of 28-29p).

What’s fascinating is their analysis of the global vanadium market, and how they have independently come to the conclusion vanadium prices will average out at $40kgV at the minimum.

They also explain that the supply side of the equation is so so tight that the world will become increasingly reliant on the small handful of producers including BMN.

All of which means that BMN is going to become crazy profitable in the years ahead !

Welcome on board - it’s great to have you here!

I take all share tips with a healthy pinch of salt but I would certainly take the FT’s recommendation higher than almost anyone’s because they’ve built up a superb reputation over the years they’d be scared to ruin in any way.

So if they’re saying they expect to see 100-130% upside from here then I would take that pretty seriously actually.

Excellent post Sanchez. Couldn’t agree more. It isn’t all about the Vanadium commodity price. It hasn’t been for a long while. And that’ll become incredibly evident with the Eskom news. Then we will he seen as a Green Energy Stock as well as a top class vanadium producer.

It’s been a long time coming but we’ve pretty much made it already.

My hope for most of this year has been that we would be at 20p-25+ by the time we get the Eskom news so when it lands we can reach 50p+ ATHs, and it’s now materialising as i had hoped.

Last chance to buy sub 20p is now.

The re-rate to 50p+ won’t happen in one trading session of course, but we can expect a major jump with consecutive rises in the days and weeks that follow.

Realistically therefore I feel we won’t see 50p+ until February 2021 at the earliest. But it will certainly happen.

I’ve got no doubt about it.

Hahaa here we go

19.15p on google a moment ago.
One massive Buy goes through at 19.375p
Now the price is rising fast and is up to 19.75p within minutes

Completely manipulated

But actually, you know what, I don’t mind to an extent because it shows today’s fall has been artificial and the rise will continue!

Clearly some v big buyer believes this 20p ish level is an excellent entry point, and they’re correct of course, so let’s chalk this up as a positive

Onwards and upwards
: )

Yeah completely bizarre when V prices have risen to where they were when they were valuing the company much higher and production has massively increased in the time that’s passed since.

Sounds harsh but I don’t think SP Angel know what they’re talking about really!

It’s either a shake or the MMs are trying to fill an order in the same way they did at 15p before then letting this float up to 20p ish

Let’s wait and see

Ultimately though, whatever happens, it makes no difference to the incredible investment case here. It’s still an absolute no brainer at these levels.

Because they’re going to be interesting in energy storage including vanadium

However , why not skip the middle man, and buy into the likes of BMN, ZNWD, etc directly?

I’m struggling to see how Pineapple will add value

Ok now this looks like a tree shake.

Don’t let them mug you off.

Ultimately feel the MMs know this will will continue to rise, and actually want this to continue to rise, so let them have their games and take advantage of you have the funds to do so!

True, if it’s a genuine dip due then it isn’t a bad thing, we’re merely consolidate at 20p for a bit before the next leg up. Like we did at 15p recently etc.

Going to top up now : )

Expected to explode in the coming months driven by a dramatic increase in EV Demand.

Since Zinnwald is geographically so close to so many huge car manufacturers in Germany it has a natural advantage because the transport costs will be so much less than it would be for others.

So this should be incredibly well over the next few months.

The fact it’s backed by BCN and ultimately Ganfeng Lithium is a major plus too, because they really know what they’re doing!

DYOR & GLA

Relax. Don’t let a small 2-5% tree shake convince you to sell any shares.

The MMs did the same trick to mug people off at 14-15p and 17-19p last week.

All those who sold will have regretted it since.

And you will regret it if you sell into a tiny 3% tree shake here today.

Hold, load up on the dips, and enjoy the ride : )

Final thing:

The Eskom news will be a game changer because it’ll prove we’re not merely a superb vanadium moving company. We could instead mean the market finally views BMN as a Green Energy stock that happens to own the vanadium resource used in its Green Energy batteries it manufactures via its partially owned companies and supplies to the likes of Eskom.

On this basis, we could be looking at 150-300p I believe.

But, for now, focusing on what’s already been achieved, the imminent target is another 100% up from here “only.”

Also, for any newbies, I would like to highlight that we were at 21-23.9p just before covid hit. We then crashed well beneath that level unjustifiably when actually, except for a month long pause in production due to a national lockdown, BMN has been completely unaffected.

- Since then we know production will still rise this year, and was an impressive 37% up in last quarter year on year.
- Financing has been secured to increase production another 100%
- Vanadium prices have risen.
- We've completed transactions to own part of VRFB manufacturers Enerox and Invinity (IES)
- Work on the Electrolyte Plant has begun after getting approval earlier in the year
- We set up an Electrolyte Rental Company which already has a deal with Pivot Power (part of EDF)
- The Eskom BESS Contract Tender process materialised and this is a complete gamechanger.

Eskom is Africa's largest utility company, and - with funding from the World Bank - they are going to build multiple massive Battery Energy Storage Systems through private contractors, and we know Bushveld is involved in the bids for these individual contracts, and incredibly likely to win at least one of them.

Without the Eskom news, I believe we will reach 40-50p

With the Eskom news, I believe we will reach 100p+

: )