Member Info for mogwhy

This appears to confirm that it is indeed the Uitvalgrond dispute that the protesters were staging the demonstration about.

"Community members living next to the mine have shut down the mine. Private security has been called in to intimidate & disperse the crowd. Residents say they’re going no where until Mojapelo an executive) comes to hear their demands"

https://twitter.com/tlhabadimo2

beatthebroker - the relationship between Vametco and the local community should be of interest to shareholders. My understanding is that BMN have spent a lot of money in the local community but the South African mindset is very short term and opportunistic.
Here's another group with a grudge.

"And in Rankotea village, the situation is no better. Plough field owners and residents are up in arms about the poor quality of the soil which is allegedly caused by poor environmental saftguards by Vametco Alloys."

https://twitter.com/RuralDemocracy/status/1453351587968073734

Part 2
The community says 2001 was also the last time they received royalties from Vametco.
Even now, members say they are unable to see what withdrawals were being made from their D-account, despite the help of their auditors, PricewaterhouseCoopers. It took a subsequent court case to remove both warring interim committees. In January 2003, Vametco also announced that it would not pay royalties into the D-accounts but would instead be paying into the individual accounts of the 83 families that make up the Uitvalgrond community. But more court cases would ensue, with Vametco then insisting that monies, if paid, would be paid into accounts overseen by members of an appointed joint committee of the two opposing committees.

It has resulted in the community remaining in limbo. It has also been established that since 2001 they have had no valid mining agreement in place with Vametco, and they also no longer have a committee representing them. They have also been seemingly ill-advised, with many so-called consultants accepting the scope of work and the payment, but under-delivering. Vametco has confirmed that it does have a surface lease agreement with the community, which was finalised in December 2017, and since then it has discharged all its duties in terms of that agreement. It also has a valid new order (NO) mining right which it obtained in 2013 under the terms of the MPRDA. The company said that it has “concluded all necessary lawful agreements and is in possession of a valid NO mining right which authorises it to conduct its mining activities on the property.” Between 2004 and 2014 the Uitvalgrond co-owners battled to have a constructive relationship with Vametco largely because the community could not speak with one voice. There is still no consensus among the community as to who sits on their executive committee. The ownership of the Uitvalgrond land remains contested.
Many parties were arriving at Vametco’s offices, all claiming to be legitimate representatives of the Uitvalgrond community.
This led to a series of meetings among all stakeholders and, from that year until the present time, a series of court disputes that have not been resolved. The court requested a process of identifying the rightful owners to the land that has taken almost two years to complete.

Some of the court cases have been withdrawn while others have been dismissed with the instruction that the community must finally decide among themselves who they as a collective will elect and recognise as their representatives. At the time of writing this report (2018) the community insiders confirmed that there is still no resolution to this matter. The community is still left writing letters and filing reports to everyone from Parliament and ministers, to the police and civil society groups.

compos - I don't know if this is the same dispute that the current protesters are debating but it's some useful historical background to an ongoing legal process between Vametco and some of the local community. Genuine investors will want to know this type of research whether it affects current operations or not. I for one, will be very happy if last weeks protesters have gone and had no effect.

UITVALGROND - part 1

The community members here are made up of 83 households of the original title deed holders who bought land here in the late 1800s and early 1900s. By the 1960s, their fortunes would change radically when government representatives are said to have come knocking, proposing deals that would let them mine community farms in exchange for compensation and profit sharing. Many different mining companies have come and gone over the years and many different deals have been struck by the community in this time. They have emerged as losers each time.

A deal was signed between the Uitvalgrond community and the mining company Vametco in April 1992. This was one year after the community had set up its first community committee and employed auditors and lawyers to open bank accounts and to provide legal advice.
Eighteen months after the conclusion of the agreement, Vametco paid R5.5-million in mining royalties to the landowners of Uitvalgrond. Another R4.8-million was also meant to be paid to the community, but there is no trace of this payment having been made.
The community has tried to understand what happened to these funds and other payments over the years and still today have few answers. Huge bills to forensic auditors and lawyers have mounted up and there’s still simmering tension and distrust in the community and little faith that authorities or civil society organisations can help.

Vametco was asked for clarification, and a detailed response was received, via its lawyers, setting out the timeline of payment of royalties to the community, as well as the amounts. Between 1992 and 2013 Vametco paid almost R155-million. Between June 2016 and December 2018, the company has additionally paid just over R24-million. However, researchers heard from Uitvalgrond members how a R500 000 contract was paid to a private forensic auditing firm meant to follow the money trail of royalties, detailing exactly what Vametco had paid, who got to access the money and what they did with the money. The forensic firm was also expected to produce bank records to detail savings and investments with a view to rooting out maladministration and mismanagement and identifying the culprits implicated in scamming from the mining royalties scheme.

The community say they paid the forensic investigators but never received any reports in return. At that time, in 2001, it caused clear divisions in the community and led to tensions that ended with government stepping in to intervene. Ultimately a new committee was elected, which caused further outrage and tensio

HaleSpur - we don't know if it's had an effect on the business or not.
Sadly, Fortune has got a history of neglecting to tell us or delaying bad news.
Investors have long memories of that type of behaviour.

It appears from social media reports that the protesters broke into Vametco last week and attempted to enter the office block. BMN (the applicant) has applied for a court order to have them removed.

"The Respondents conduct is unlawfully interfering with and jeopardising the Applicants operations and safety measures. The relief sought is accordingly extremely urgent. At the time of deposing to the affidavit, the Respondents have presently passed the second gate at the mine and are attempting to enter the office block. The Respondents have also blocked the entry and exit gates and have made it clear that they will not leave until the CEO attends at the Mine Premises to receive their Memorandum."

Ninvestor and HaleSpur - expect to get hounded by the pack now that you've agreed with me that the short term prospects here don't look great.
My longer term view hasn't changed.

SIPPmeister - my mood will change when Duferco have gone, the vanadium price is at least $40, the exchange rate is 15 plus and when kiln 3 comes into play.
Until then I reserve the right to be downbeat on the short term prospects.

Codejunkie - there's a reason that Duferco have insisted on no lock in period or orderly market arrangement. We will now have to endure a 65m share overhang for the next 6 months whilst Duferco sell down.

Vametco protest. FM doesn't seem very popular.

https://twitter.com/insightfactor

Anyway, the point is that Pdub wants me to pat Fortune on the back for ensuring operational stability this year when this is something that should have been done before the expansion program in 2018.
It's no good increasing the flowsheet output if you can't hit the intermediate numbers. It's basic stuff which he either ignored or was just trying to wing it.
Either way it was mismanagement.

BumblingFool - you've included Vanchems production in that figure.
The 3,750 target was for Vametco only.

Jhill84 - play the ball, not the player.
My investment status doesn't change the facts.

The quarterly runrate to hit 3,750 pa is 937.5 mtv.
There has not been one quarter since June 2018 when the expansion project was completed that that target has been hit.
There is a reason for that.
And no, it wasn't covid.

"Bushveld has successfully completed the second phase of the three-phased expansion project at Bushveld Vametco, on time and within budget, allowing the company to take advantage of the high vanadium price which has persisted in the first half of 2018. This phase of the expansion project increases the annual production capacity from 3,035 mtV, achieved in Phase One, to 3,750 mtV, with a capex of USD 2.5 million."

Vametco has never produced more than 2,931 pa since.
Perhaps Pdub can tell us why.

Pdub - you have conveniently neglected to mention that it was Fortunes mismanagement of the maintenance that was the cause of the operational instability in the first place. He tried to cut corners and it's come back to bite him as he admitted to in the Crux interview. As Matt put it, "growing pains".

James0309 - the total group cost per unit was $29 in 2020. I had hoped that we would get below that number in Q4 to set us up for a good 2022.

Pdub - there were lots of positives in the RNS but they should not have been in the position where they had to take action to produce those positives. Preventative maintenance to produce steady predictable production is standard operating procedure in any engineering operation.
One of the red flags I ignored in my original investment risk analysis was Fortunes lack of experience in running this type of operation and that has cost me 3 years of lost investment opportunities elsewhere when I could have deployed the capital to greater effect.
Look no further than Dave Reeves at Calidus on how to run a company and treat your shareholders.

BenAlder - that's a fair analysis except for the selling and buy back cheaper dig.
Investors have endured 2 years of setbacks and disappointments and now it looks as though we have several more months of waiting for Duferco to sell down again plus more industrial action.
A few months ago the vanadium price was rising and it looked as though we would have a good H2 and become cash flow positive. That's all changed in the short term with the V price downturn. It's all very well claiming to be a bottom quartile producer but BMN isn't making money at the long term V mean price. I know that will change when they get production up and costs down but that is still a year away and will be in an unknown V price environment.
BMN continually disappoints in the short term and always gives us a reason to expect great things next year, but so far it hasn't happened. After over 3 years here I'm back at just over breakeven and consider this investment as a failure.
If I was investing now for the medium term (1 to 3 years) I would consider the prospects to be outstanding just as we all did 3 years ago.

I must correct one of my previous posts which said that Duferco sold on 24th Dec. This was incorrect as I misinterpreted the TR1 as a sell statement whereas it was informing of the acquisition of the shares on admission to AIM.
As James0309 has quite rightly said, the 2m sell was on 4th Jan.