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If the conservative production guidance numbers and all in costs are on track, and we have no evidence to say that they are not (in fact the $/Zar rate across this quarter suggests costs will be below guidance), then I make it that BMN are on a Forward P/E of about 1.5 at the current Mcap of just £55m!?
If the Q1 numbers confirm guidance on track or bettered, and gives reassurance regarding the CLN position, then I expect BMN to start a swift journey back to fair value north of 15p.
Even stainless steel manufacturers are scared about nickel supply, not just EV/battery firms.
https://www.reuters.com/markets/deals/indias-jindal-stainless-strikes-157-mln-deal-secure-nickel-supply-2023-03-28/
So can anyone help me understand how Asian Metals are calculating the values in the table they produce each day?
For instance European FeV80 (Rotterdam) is showing as + 8.19% in the 360 day end column.
But with prices a year ago being around $62 in Europe (following that terrific run at the start of 2023), and today it being around $41 then that clearly isn't growth of 8.19%
Bit confused.!?
From Largo Q4 results last week;
The average benchmark price per pound of V2O5 in Europe was $8.25 in Q4 2022, being largely in line with the average of $8.23 seen in Q3 2022 and $8.30 in Q4 2021; The average benchmark price as of March 3, 2023 was $10.78, a 44% increase from the lows of 2022
The average benchmark price per kg of ferrovanadium ("FeV") in Europe was $33.35 in Q4 2022, a 3% decrease from the average of $32.29 seen in Q4 2021; The average FeV benchmark price as of March 3, 2023 was $40.88, a 30% increase from the lows of 2022
Seeing as most see offers for HZM appearing in a little over a year from now, I'm pondering what percentage of A2 would constitute a fair offer?
Post A1 production ramp up by Q3 2024, I currently have a fair offer as;
min 0.8x npv of A1,
0.2x npv A2,
0.1x npv Vermehlo (new (hopefully enlarged) NPV after the full DFS is published in approx 12mths).
Plus cash value on the balance sheet and land value of Araguaia N.
However in light of the RNS this week, I'm wondering whether I should re-evaluate the percentage of A2?
After all with Matte included and potentially it all being funded from existing debt carry over and FCF, with the now "equivalent of $100m"(JM) of kit already bought for peanuts, then we should sell it as "good as built" and expect more than the 20% I had previously budgeted for.
Yep - they're pretty desperate for nickel.
I return to the point that EVs need a Co2 (ESG) production rating so that consumers can make a considered choice - not just price or performance.
Is any organisation proposing a standard for this?
After all an EV has an environmental impact several magnitudes higher than a fridge freezer!
And we mustn't forget, that Mr.Musk needs nickel as he so often tweets;
Musk asked the mining industry in 2020 to produce more nickel “in an environmentally sensitive way".
I'm assuming therefore that currently he wouldn't buy Indonesian sourced product.?
Thanks TDT.
I suppose what is really required is transparent pricing platforms that factor in environmental impact in their grading categories.
Maybe in the future we'll buy commodities in the same way we buy a fridge freezer!
HZM are on their way to being an A++ rated jumbo American style.
When buying vehicle, aren't we reaching the point where manufacturers of EVs need to be rated on the environment impact of their supply chain and manufacturing.? If that happens, then Vermehlo really is in business!
TDT or anyone else.;
With regard to this thread, what are the terms of our 100% offtake agreement with Glencore?
I know it was said to be at "market rate" if I recall correctly, but just what market would that be? Not LME I'm assuming.
In June 22, 8 months ago, BMN released an RNS on the study of costs to expand production to 8000mtv annually.
Costs in that RNS were put at 2.3bn Zar which was $151m at the time.
That same cost is now just $125m at today's Zar/USD rate.
Sensibly BMN paused their expansion plan until the existing business could reduce its debts by being cashflow positive. And that's the phase we are now in.
However I'm just considering what the rise to 8000mtv would bring.?
Economies of scale, wider margins, greater product range and flexibility etc.. As well as and extra 3000mtv of sales.
That extra 3000mtv at today's V price, and a cash cost of max $25/kg and no further overheads, would add around $45m of profit after tax.
The $125m investment would therefore pay itself back with under 3 years of enhanced production after the 18mths+ of refitting. That must be a pretty impressive IRR if someone cares to calculate it.
With all we know about projected V demand (enhanced defense spending, grid storage and vrfbs going mainstream, US Inflation Reduction Act subsidies, rebuilding war zones, earthquake resistant rebuilds with stronger rebar, lighter anrefitting # el efficient alloys needed for transport/aviation etc, etc ..) it is likely that the production margins will grow sharply too and the investment case becomes even more compelling.
It leaves me thinking that cashed up players like Glencore must know all of the above.
As the load shedding problems in SA subside over this year of emergency government action, they could takeover BMN, implement the expansion plan and develop Mokopane for small change in their world.
In fact why wouldn't BMN be a target for a major?
The challenge for BMN to stay independent and grow at the pace required to supply the green transition so as not to stall vrfb uptake, is balancing act they face.
Maybe they should entertain the idea of a Joint venture.?
Are yesterday's US/EU sanctions the final coffin nail for LME nickel market which has continued to accept russian sourced metal ? Liquidity was already in terminal decline.
https://www.ft.com/content/82dbb951-fc4b-4b74-9511-432d85127f22