£1 per share - reminder19 Jun 2018 11:17
Imo, there is an excellent chance that Bushveld’s share price will be well in excess of £1 next year.
Firstly, the recent webinar confirmed our thoughts on the future of the FeV price.
Demand/supply forecasts show that it is going to be a very favourable period for all vanadium producers over the next few years.
The supply shortage is set to continue; there will be growing vanadium demand and only limited new supply coming on line, mainly through our own expansion and from Largo’s expansion.
Therefore the FeV price will remain very strong throughout this period and from a starting point of around $70 to $75 per kg, any bounce will be very positive for both BMN’s profits and therefore it’s share price.
Secondly, we know that Phase 3 of the Vametco expansion is underway and is likely to be finished ahead of schedule, taking our production to over 5,000 tonnes pa.
Thirdly, the planned Sojitz buyout will take our Vametco share to around 74%.
Buying out Sojitz and producing 5,000 tonnes pa at an average FeV price of $75, gives Bushveld profits after tax of £99m, giving a forward PE of just 1.98, at the current share price of 18.35p.
With our incredible growth prospects, I think it is easy to justify a PE of at least 15. That would give us a share price based on those figures of £1.39 later next year.
The FeV price almost certainly has further to rise from its current levels, increasing our profits and therefore our share price even further.
Also, bear in mind that this valuation only takes into account our share of Vametco.
We also have so much more to come.
In no particular order.
Mokopane mining licence (imminent!).
Details of Mokopane early revenue generation.
Brits vanadium resource news.
Bushveld Energy contracts/progress.
Electrolyte production news.
Eskom VRFBs.
Potential brownfield addition.
Imaloto coal BFS.
etc!
It’s been said many times before, Vametco is definitely just the launchpad.
Bring on £1 and beyond!
DYOR of course :)
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