Lionel's Big Picture (1/8)3 Oct 2020 13:32
I offer an attempted "big picture" of BMN and its prospects. The aim is to help orient new investors to the company, and newcomers to this board.
Q1. What is BMN?
A. One of the world's top three (primary) vanadium miners/producers, with some of the world's biggest high-purity vanadium deposits (in the Bushveld area of South Africa). Production is ongoing, and is already very profitable, and the company has ambitious plans to increase production and sales, and to diversify.
Q2. What is vanadium?
A. An element used (at present) primarily for strengthening steel, used in large (and increasing) quantities in the manufacturing and construction industry (as rebar).
Vanadium is actually very common in the Earth's crust (the 20th most abundant element), but sources of sufficiently high concentration to extract economically are more limited. Demand for vanadium is expected to rise strongly over the coming years with the ongoing take-up of vanadium redox flow batteries (VRFBs).
Q3. Context: who are the other major vanadium miners?
A. Principally Glencore's Rhovan in South Africa and Largo's Maracas Menchen mine in Brazil. Various others are under development or consideration.
In addition to primary sources, vanadium is also produced (mainly in China and Russia) from steel smelter s-l-a-g, but with issues such as supply and pollution.
Q4. What are BMN's vanadium resources and processing facilities?
A. They comprise (see company www site):
* Vametco, an integrated mine and processing facility: the mine is opencast, along a strike of approximately 3.5 km. It produces a steel-alloying vanadium carbon nitride product, called Nitrovan.
* Vanchem: a primary low-cost vanadium processing facility, producing vanadium pentoxide, ferrovanadium, vanadium chemicals and it is capable of producing vanadium trioxide.
* Mokopane: one of the world’s largest primary vanadium resources, foreseen as a primary source of feedstock for Vanchem. The long-term plan is to develop Mokopane into a standalone integrated mine and processing plant.
* Brits: prospecting rights and a mining right under application on farms adjacent to Vametco. Brits has the potential to supply additional feed tonnage for the Vametco plant, and if required, concentrate feed for Vanchem.
Presently, BMN produces 3400 mtV (metric tonnes of vanadium) per year, and has short-term plans to triple this to more than 8400 mtV, compared with the total global vanadium production in 2019 of around 110,000 mtV.
Q5. What underpins BMN's share price?
A. BMN's position as a low-cost vanadium producer, at a time when vanadium is in structural deficit, with the company's ambitious plans for increased production at a time when world-wide building (e.g. earthquake-proofing) regulations are expected to lead to an increased demand in future (e.g. in China, and elsewhere).
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