BMN tidying up the % holding change to their ATM holding post ATM share issue. Just like yesterdays RNSs this is months out of date and looks like a bit of due diligence house keeping. The big question is...…… ahead of what ??
ok - well when you do, you have to sort out and tidy up all the financial loose ends you've ignored. Get all your paper work in order and then you can stick it all in with confidence that a little error in your earnings or borrowings won't delay your getting the loan you need. Any pennies dropping ?
Anyone who read my "Back to the Future" post last night - I hadn't been drinking and I wasn't high on pain killers or anything, I just couldn't see a better way than using a bit of (I hope ironic) humour to try and make a point. That being, think where the other 99 out of 100 companies might be starting from where we were. You only have to look at IRON to get some insights.
The S.W.O.T. post is to back that idea up and I just had another thought flit across my brain. Another victim of our own success missed Threat is that early backers who probably never could have expected such fantastic gains in such short time will inevitably exit.
Anyway - that's my tuppence for today.
A few years back, with contributions from many others but substantially BBN and I. We conducted a comprehensive SWOT analysis on this board. Some may remember it. We also identified the mitigations necessary to counter the Threats and Weaknesses. Much of what we discussed back then has come into being. But it is time to fess up to a significant Threat that none of us saw or even perhaps could have seen......Our own success.
The BMN share price was magnificently successful through March to December 2018 coming off an already spectacular 300%+ rise in 2017. Many will no doubt recall my prediction of where the share price would go was passed with ease without any slow down. With the benefit of those 20:20 hindsight spectacles we all have this was always going to happen. Why ? Because, sadly, this is AIM. The wild west for investment. Anything that goes up like we did will become a Target for the swarms of manipulators who make their money not by positive wealth accretive means but by employing leveraged instruments to bet against the winners during corrections to exacerbate with usually morally and ethically dubious (but sadly not entirely illegal) manipulation of hearts and minds.
Coupled in with this, our success in becoming, against all the odds, a producer by achieving Brownfield production at such an early stage in our existence also to some extent worked against us. BMN had to learn on the hoof what management of a big mine and plant was, the management made some blunders both in industrial relations and in technical management of the asset and we saw too many (late) RNS's describing problems.
So that was two huge successes that played against us. The Third was that BMN had the foresight to see the Vanadium opportunity and to start working to make it real. VRFB was a dot on the horizon when that opportunity was spotted and yet now it fills the view, what hasn't worked for BMN is the timescales in which these things gain traction, the time it takes to create the infrastructure, the time it takes for the disruption to get going.
I could go on, and maybe I will (for my own needs) revisit that SWOT. But the takeaway here is that the BMN success and speed of success was a threat we missed, nothing more. The strengths are all there, the opportunities remain, the weaknesses are for the most part addressed and mitigated and no new significant threats emerge. TIME is all that is required to mitigate the threat we missed.
Handover. Acceptance by the entity (captain) responsible for moving it.
There is a lot of scary BS being thrown about in the last week by some with obviously nefarious motivations. Nothing is wrong here, no timeline has been missed. Relax. when the drill bit starts turning the countdown to significant upside will have started for real.
p.s. research is never a waste of time !!
Just fired up the De Lorean and took it for a spin. Went back to Jan 18th 2016 and noticed an RNS about to be lodged which included the following:
• ?Complete pre-feasibility study ("PFS") on the Mokopane Vanadium Project and further develop the project in conjunction with a strategic partner
• ?Explore acquisition and/or partnership opportunities in respect of brownfield processing infrastructure to accelerate a path to production and substantially reduce capex requirements for the project
• ?Support the vanadium demand outlook through an active strategy to promote the adoption of vanadium redox flow battery (VRFB) systems in the Southern African energy sector. Please see the separate RNS announcement released today, titled 'Launch of Bushveld Energy Limited'
• ?Consolidate Tier One quality, primary vanadium resources in South Africa - the Sable Minerals transaction, which is now nearing completion, forms an important part of the consolidation of high-grade primary vanadium deposits in one of the world's richest vanadium provinces
Clumsily spilled my coffee over the page before it could be released deleting everything from the second bullet onwards. BMN therefore required to follow RNSed strategy in a new reality:
Remembering what a red letter day 22nd April 2016 was, jumped to there to cheer myself up.
RNS from Evraz. Given the state of the Vanadium Market and out outlook the Vametco plant has been closed and all kit decommissioned and sold off.
RNS from Bushveld. Pleased to announce a placing of 500,000,000 shares at 1.6p (20% discount to the market rate) to raise £7,500,00 after expenses to begin design work for Mokopane and for working capital.
Perplexed and slightly worried, returned to the present only to discover a new reality in which the shares in issue was now 5.5 Billion and share price was 0.0877p. Holy crap, spent a lot of time repairing the spilled coffee conundrum and had to have a lot of goes at it. In every other reality to this one the share price was lower, the shares in issue was higher and the development of the business was stunted in comparison. How can we possibly be where we are and when we are ?
The answer turns out to be that there is no other scenario save for the brilliant strategy originally executed which saw production established and growth maintained for a fraction of what it should cost – even funding it from within the asset itself. No other scenario got anywhere near a share price in August 2019 of over 10p. No other strategy kept shares in issue down to around 1.1 Billion. The only consistency was that in every reality a sizeable proportion of shareholders were complaining.
@Daisydog, there is nothing at all at Mapochs that we would want or need. I suspect that competition commission would not block any sale of Mapochs once Vanchem is under new ownership with a ready source of ore. The Mapochs situation goes way back to an EU competition ruling when EVRAZ bought their assets (including Mapochs). Vanchem were granted preferential access to 50% of Mapochs ore.
@numpty5 - I would very much like to see Lemur divested but much as the revenues that could generate would be welcome, I don't see rushing upgrades at Vanchem as being sensible. Slowly and methodically potentially with electrolyte manufacture dovetailed in their too.
Never one to be shy of putting out a number to get shot down. I see Q3 production at 631 MtV +/- 15 but very much depends on the real length of the shut down. But I see Q4 as 835 +/- 30.
Let's see how close that is come year end.
On Vanchem - I really need to see if I can find some details on the Plant kit and processes as to date I have nothing to let me feel the pulse on that site. Given the length of down time on some of that kit however, I really think it needs to be carefully and slowly brought back into production. I'm looking forward to hearing the story unfold.
My ongoing estimates of cash flow etc leads me to believe that BMN could buy Vanchem out of cash now but that they would not then have sufficient to execute the upgrades at either Vanchem or Vametco or the Mokopane mine. I therefore concur that a debt facility will be required. I do not however foresee any dilution for us shareholders. I think we are now at a point in the cycle where we can raise money without that burden. I know I've gone on about a Vanadium Bond to fund the electrolyte lease programme. A BMN Bond would be very nice to see here to fund this expansion
@BBN - always a pleasure to bat stuff across the net with you !
I still think there is plenty to come from the Transformation project. There was some interesting commentary on some of the lab data from the recent drilling data published with the resource upgrades at both Brits and Vametco. I know we were looking at those data from a strike extension perspective but along with the comment "Improvements in mine production scheduling ", I'm increasingly of the opinion that they really didn't know what grade of material they were shunting in the front end and that now they have a proper process running that reconciles input and output they are better able to balance the Kiln loads and not waste Sodium chemicals whilst improving yields. To be honest, I speculated on this about a year ago but I really think I was right and that what we see now are the immediate paybacks on sorting that out. That being so, the baseline from which genuine process improvement initiatives can go ahead is already better and I'm very confident that we are going to see possibly another 20-25% productivity improvement. My model shows us running at about 60% of peak nominal capacity, that can easily go to 75-80% where I would expect a process such as this to be happy.
Thanks as always for your insights BBN.
Hi @BBN - OK that's fair enough. I would point out that production costs typically fall the higher the volume produced and caution that you are using sold volumes not produced volumes in that calculation but as yu point out later that can only mean the real figure is even better. All in all however you cut and interpret the figures we can see a clear picture of reducing costs and improving production. As I posted recently I have us at 60MtV per week now and expect we will exceed guidance by year end. Thanks as always for your thoughts.