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Cindercone perhaps your maths is better than mine so I will offer a few numbers and see what you think.

Let’s start with some assumptions. We have to do that or it is impossible to consider any future possibilities.

Let’s start by assuming 2023 delivers 4200 mtV. Might be a challenge but lower end of target. And let’s ignore completely any electrolyte sales. Keep things conservative.

Let’s also assume ARCs AISC of $35 kgV is accurate. To keep the conservative theme I will ignore further falls in AISC due to the current favourable Dollar Rand.

Now let’s assume an average achieved V price of $40 kgV. I will ignore any premium for Nitrovan and any higher prices achieved for chemicals.

Applying those numbers results 4200 mtV at a margin of $5000 per mtV gives a gross profit of $21 million pa.

That provides quite a lot of readies for investment. I could be less conservative and raise some of those numbers for 2023 but I will keep those assumptions. However moving on to 2024 let’s review the numbers.

I am going to assume the lower target of 5000 mtV delivered.

I will keep to AISC of $35. Arguably this is very conservative as increased production should lower costs but let’s ignore that.

V price of course is highly speculative so I will base this an what is in the public domain. The number of VRFB projects being announced is rapidly increasing and that will require extra Vanadium. I will assume a very conservative price rise to $45 kgV

So for 2024 using the very conservative assumptions and again ignoring completely electrolyte production, Nitrovan premium and high value chemical sales we get the following: 5000 mtV with a margin of $10000 per mtV gives a gross profit of $50 million.

So over the next two years we have a possible gross profit of $71 million. That’s more than enough to service debt and begin the 4 stage investment leading to production of 8000 mtV pa, with some left for dividend?

And that uses a very conservative and certainly not unreasonable set of assumptions. As a teaser if in 2024 the V price averaged $60 kgV (your number) profit leaps to $100 million in that year.

Now add lower AISC due to higher production, a premium for Nitrovan, high vanadium chemical revenue and revenue from electrolyte sales and … well I will let readers write their own numbers.

So Cindercone when you wrote “Not a cat in hell's chance of this happening for at least 5 years, unless V prices hit $60 and stay there, permanently.” Could you please explain as given the numbers above that statement seems to make no sense at all. Of course there can be debate about assumed numbers but I think I have been fairly conservative given what we already know.

You are welcome. Hope it was helpful.

Beginerman I am more than happy to answer your question and I will take what you say in good faith. However please understand that I am far from being vindictive which you accused me of the last time I went to a lot of trouble to answer one of your questions and was very disappointed with your response. That post took the better part of an hour to write and you totally dismissed it.

You ask about AISC of $35 kgV for 2023 and it’s origin. As with all “facts” and numbers that I use it comes from an official published source. That source is the ARC Analysts Report dated 02 February 2023. There is a table on page 2 which clearly states their estimate. They include the following explanatory footnote about what it includes:

“AISC - Including royalties, marketing costs, G&A, corporate overheads and sustaining capex (excludes depreciation and financing costs)”

The reason I included ‘or less’ in my post is because the ARC forecast assumes a Dollar Rand rate of 17. As published in the recent Update we know that for Q1 it was 17.8 and in the period since it has maintained a value in excess of 18. The relative effect of this is to reduce costs v revenue and thus AISC may come in at an even lower figure than $35 kgV.

Here is the link:

https://www.bushveldminerals.com/wp-content/uploads/2023/02/Bushveld-minerals-BMN-LN-Record-production-achieved-in-trying-circumstances.pdf

You ask how current this is. Well Feb 2023 is very recent. However in the ARC report on 27 April ARC state” Estimates and Valuation unchanged”.

AISC estimate thought to be around $35 kgV or less, aided by average Dollar Rand rate of 17.8

V prices (from RNS)

Europe $39.4 kgV
China $37.8 kgV
USA $42.5 kgV

Above prices make no allowance for Nitrovan premium and high priced chemicals.

Good margins therefore in all markets. Expecting significant improvement in cash based upon above numbers. 1028 mtV sold in Q1 including at least 85 tonnes of cost paid market ready stock.

It’s not that hard to understand with even modest research.

Oh good grief not another trolling expert.

Yes a lot has happened. Do you live in a cave?

Q1 saw very high sales and a cost / revenue (v price) relationship that will have generated significant cash flow. The numbers are in the public domain.

BMN has increased sales into the US the highest priced market. We don’t know the Nitrovan premium which should increase margins vs FeV and of course Vanchem produces high value chemicals which will bring in additional revenue.

Recent fallback in V price Q2 has had less effect on US market which should be still profitable.

Orion will have seen all of this hence the willingness to renegotiate deal.

Happy yo help you.

Give it a rest TA.

Also pleased that $27 million cash repayments, although scheduled, can be paid off at any time. If the predicted V price rise in 2023 happens and significant profits made then early repayments can be anticipated

This may sound obvious but remember the debt restructuring is in US$ not £. That includes amounts covered by CLNs. Conversion amounts in £.

Exactly Clark. Another obstacle to progress removed. It is not about today’s share price. It is about 2023 being a good year for BMN operations. Removing the debt deadline leaves the way clear to focus on production, costs, new developments, revenue and profitability. All of those looking very encouraging from what facts are in public domain.

Take a look at Ronnie’s history. A trader talking the talk.

Best ignored.

Don’t be silly Ronnie.

Part 3

“The new maturity profile is designed to allow the Group to repay the debt from internally generated cash flows in the years ahead as we see the benefits of our recent expansion plans at Vanchem come to fruition.”

Perhaps even more important is the plan to repay the debt over the period through cash generation by the company’s vanadium operations. Clearly Orion know this and have faith in the management to deliver. And don’t you love the cross reference to the Vanchem expansion generating that cash.

Strategic vision is one of Fortune Mojapelo’s qualities. That alone does not make a great CEO. However delivering that vision most certainly does … and that is exactly what he is doing. About time the market woke up to this.

Well done Fortune Mojapelo for removing what the trolls have constantly suggested is the main drag on the share price, and delivering it earlier than expected.

2023 really is looking like a very good year for BMN.

Part 2

So why is today significant?

“The proposed refinancing will resolve a large liability that became current in 2023 and will remove significant near-term pressure on the Company's balance sheet, in the process supporting sustainable growth and cash generation of our business.”

Clearly management knew that the Orion debt was of concern to the market and in both of the last 2 Quarterly updates we were assured that various solutions were being considered and negotiated. Of course there were some that did not believe they would be successful but today proved the doubters and trolls completely wrong.

And this news was delivered in such a way to the market that it demonstrates no “leaky ship”. Everyone was caught by surprise. Good that management is so trustworthy in this respect. Well done Fortune Mojapelo.

Reminder of Orion partner financing

Part 1

Remember what the original purpose was.

“In 2020, Bushveld Minerals agreed a US$65 million financing transaction with Orion, which included a US$35 million convertible loan note ("CLN") maturing in November 2023, as well as a US$30 million PFA. The CLN was primarily intended to finance expansion plans at Vametco… “

This was management ensuring that funding was available to meet the needs of Vametco expansion.for a growth company with a clear strategic vision this was an essential step to take.

“ …however, this was subsequently amended, following further studies, to also fund the refurbishment and expansion of Vanchem including the commissioning of Kiln 3. “

Equally important for good management is being flexible enough to recognise changed priorities and effectively respond. History tells us that the key objectives of this funding were absolutely met, resulting in 2022 Q4 producing more vanadium products than envy other quarter in the company’s history. And despite the challenges involved in commissioning Kiln 3 at Vanchem group production was higher than any other year in its history!!

No matter what the idiot trolls tell you that is impossible to deliver with anything other than very good management. Well done BoD of BMN.

Guys TA is working a strategy. Oldest one in the book. Winding us up and distracting from the excellent news in today’s RNS.

If we keep responding to him he wins.

Leave him to play with himself.

One thing is certain Alex. Orion will have seen exactly what the cash position is and how it has been achieved and what the future will deliver. It is very clear that they like what they see,

Exactly Justdandy.

Let’s not forget that the debt was incurred to allow upgrade and expansion of both Vametco and Vanchem. That investment produced record Quarterly production in Q4 2022 and the year gave record group production. This is exactly how financing should be used in a growth company and the rewards should begin to appear in 2023.

However that investment is key to the long term success of the company, especially in the 100% BMN owned Vanchem.

Folks TA is working a trolls strategy of distraction here. We all know this. I suggest we all leave him to play with himself.

Shareholders have had a tough time recently. This sad little troll doesn’t have enough decency to allow us to enjoy the day.

Leave him to wallow in his trough of mean spirit. Let’s focus on BMN.

It should come as no surprise that BMN and Orion are working in partnership because it was flagged up in the original financing RNS. Always pays to read the detail in BMN RNSs as they provide signposts to the future.

Extract from RNS 20 Nov 2020:

Fortune Mojapelo, CEO Bushveld Minerals
“I would also like to welcome Orion as a significant investor into the Bushveld story, their support provides further confidence in our development plans we have in the coming years”

Philip Clegg, Portfolio Manager at Orion, commented:
"We are thrilled to get the expansion at Vametco fully funded and to support the refurbishment plans at Vanchem. We are looking forward to partnering with Bushveld as it executes its growth strategy and ongoing advancement into battery technologies."

Significant investor, partnering, executes growth strategy … how many more pointers did they need to give about the close working relationship and support?

Well done Fortune for doing EXACTLY what you told us you were doing in the last 2 updates … negotiating resolution of the Orion debt. And today once again you have delivered.

If I am not mistaken Fortune has also pulled off a brilliant piece of PR. Were we not promised more detail in Final Results and suddenly we have today’s RNS so much earlier? I think a lot have been caught out by this master stroke. Shame!

Hopefully today’s news will allow further share price growth through 2023 as the operational progress that I have focussed so heavily on begins to translate into better numbers and finances and without the debt drag that so influenced the pessimists.

On a personal note I have been the target of much abuse and insults recently for simply supporting a very good CEO and emphasising the operational progress made by the company. One particularly rude character called me vindictive. I now realise that was a typo. He meant to write VINDICATED!

Fortune is a talented and honest CEO. He promised us a vertically integrated Vanadium platform. Despite huge challenges step by step he is delivering on that promise. I maintain my support for him.

Stay positive everyone. It works.