Great vision from BBN16 Jan 2019 18:55
@Daisan, Sanchez599, You may well be right and I do try to take all opinions in the investing world with a pinch of salt, until such time they can be verified. We all owe ourselves and our hard earned that at least. However, Mastermines adds value to a vanadium world where information is very difficult to find, so pinch of salt granted, there is worth in what he shares, promtion led or not.
I must say though that the same production increases would be stimulated with prices holding in the $15-20 range over a lengthy period. How long this period must be is a question only the financers of these projects can truly answer. Thus far we have yet to see a pure play project tested finance wise because none of them are ready yet. But the likes of Blackrock and TNG are testament to how difficult the task remains even in an environment of better pricing. That's because the problem still comes back to risk and security for the money that is being lent. These mines are selling themselves on a 20-30 year mine life, and right now the long term average price(talking vanadium) remains below the profitable level of said mines, so finance is still difficult to achieve.
So we are talking a sustained period of healthy profitability. Yes that still comes from much higher prices but with those higher prices comes far more substitution, and therefore unknown risks and potential pricing volatility, which again undermines investment by adding to the risk.
Having said all of that, the likes of Mastermines are backing future vanadium plays, i am not. That is why as it currently stands, for me the correct play in vanadium right now is existing vanadium producers with the ability to expand into the supply void. Nobody is better placed than BMN to do that.
BMN is cash rich and therefore mainly reliant on its own success in order to expand. That is why it has the ability to bring (effectively) the next new vanadium mine into play.
The substitution card worries me in the medium term, which is why I don't like super high prices. BMN themselves stated in the Vanadium 101 presentation in May, that substitution becomes a worry when "sustained higher vanadium prices" are maintained.
It also has the potential to undermine the leasing model until such time I see figures and/or contract wins that counter this argument. However, these concerns do not undermine the medium term investment case for BMN because what we are debating here is prices above $15 per lb, which is heaven for existing vanadium producers with the ability to expand and thus corner increasing quantities of the available market.
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