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I get criticism from some quarters for being too positive about BMN.

Well eat this quote from that article. It reinforces everything I have been saying:

“2023 is Shaping up to be a Compelling year for Vanadium
Vanadium demand is being revolutionized before our eyes and early success of VRFB projects in China are driving a step change in demand for the battery metal.
Recent Vanadium price increases signal that large battery storage projects are having an impact on the market. We think investors should watch the success of projects in China closely as they will likely spur further increases in vanadium prices in the months to come.
The vanadium market is still very illiquid with big, multi-year contracts dominating. Small increases to demand have historically always led to spikes in price. This time isn’t likely to be any different.”

Thank you JP. Very helpful.

You could regard my post as worst case scenario.

ARC also suggest all in production costs of $35 kgV for 2023.

Current Vanadium price in US and Asia is $45 kgV

That is quite a margin for profit. I wonder how the market will react when those numbers start to appear in RNSs

I see we have a few sceptics with regard to the BMN share price, despite increasing evidence that indicates the potential for considerable share price growth from this point. So what do the PROFESSIONAL analysts think?

In the recent analyst’s report by ARC they assumed a V price of $40 kgV and a Dollar Rand rate of 17.00 to produce an un-risked NAV of 16.5p per share and a risked NAV (x 0.7) of 12p per share.

However both those numbers have been exceeded already. In both US and China (aka Asia) vanadium price already around $45 kgV and in Europe will soon be $40 kgV if as seems likely the rises continue. If we assume over the next year an average V price of $45 and a Dollar Rand of $18.00 (at time of writing it is $18.25 and rising!) then those numbers change substantially upwards.

This would produce an un-risked NAV of 27.8p per share and a risked NAV of 19.46p per share using the numbers from ARC report. Factor in big improvement in sentiment once clear how debt is dealt with and who knows where this share price could rise too. That suggests an increase of 300% on the current share price. Some investors might find that an attractive proposition.

Production and electrolyte sales due H1 should impact on revenue profit and sentiment too.

Of course there are a number of assumptions included but whatever the exchange rate and V price over the next year it should produce a higher share price, possibly a much higher one.

Now I am sure many of us to a greater or lesser extent take analyst forecasts with a pinch of salt. However at least they give solid reasoning for their forecast and the accuracy of their assumptions will impact upon outcomes.

Up to you to look at what the company is doing and form your own opinion. I don’t give specific share price predictions as there are too many variables, so I stick to general conclusions such as there is the potential here for considerable share price growth subject to favourable production, costs, V price and Dollar Rand. Those factors all look very positive right now.

Just my opinion.

By now anyone following the BMN story should realise that the vanadium mining and processing business is now producing record tonnage pa and with costs down, Vanadium prices well above longterm average and rising and the Dollar Rand exchange increasingly working in their favour the company is becoming increasingly profitable. So what about the energy side of the business that is the latest growth part of the business?

The VRFB energy storage industry is a new and essential part of switching from hydrocarbons to renewable energy at a global scale. The BMN BoD had the foresight to see what was coming and have spent time and money positioning the company to both lead and benefit from the opportunities presented by this new industry.

To that end they have taken a number of steps:

Stabilised and increased production at Vametco and Vanchem which provides sufficient extra Vanadium production to supply the manufacture of electrolyte whilst still supplying their core market the steel industry.

Identified the issue that early VRFB companies were too small to succeed so BMN acted as the catalyst to bring Avalon and Red together to form Invinity, which is proving to be a more successful incarnation than the earlier companies. This company is a potential customer for BMNs vanadium and electrolyte. That model is being repeated with Enerox.

With Avalon they developed the rental model for electrolyte to solve the problem of volatile Vanadium prices. Once again they led and now others follow and this is likely to be a significant source of revenue.

They have formed a partnership with the IDC and have invested in a new electrolyte manufacturing plant which is almost complete. This will come online in H1 and just as the VRFB business is picking up pace globally. Timing could not be better.

The revenue streams will include electrolyte sales (beginning in H1) and revenue from rental agreements.

There will no doubt be other revenue streams but these are the two immediate opportunities. And of course they are creating another market for BMNs own vanadium output.

I think it is fair to say that it has taken the global VRFB industry longer to develop than most had hoped but things appear to be moving at increasing pace now. Perfect timing for BMN to exploit this new market.

Just my opinion.

Excellent response JP.

Only thing I would add is in relation to high V price. CEO way ahead on this. BMN and Avalon (now part of Invinity) developed what I believe was the first electrolyte rental model, specifically designed to offset the upfront cost of Vanadium by spreading cost to consumer over lifetime of battery.

Now others are following where BMN led the field.

What is interesting to me about the shipping of electrolyte is that it does not have to be made locally. In other words electrolyte manufactured in BMN’s East London plant can be exported by ship. Potential to be sold anywhere in the world. So bulk and shipping costs are not an impediment.

Rand is continuing to weaken against the US Dollar. The is favourable to BMN as costs (mostly local within South Africa) are in Rand whereas revenue is in US $.

Already profitable the margin between cost and revenue is increasing due to the exchange rate. More cash for BMN.

Combined with rising Vanadium price BMN is a perfect position to benefit

Following on from yesterday’s high volume today we have the highest volume since September and on no news! An indication of growing interest in BMN.

We also have Twitter gurus acknowledging BMNs potential. Better late than never …

Vanadium prices around $45 kgV in US and China. At this level any sales likely to be producing upto $10 kgV profit.

Dollar rand rate around 18 so with costs in Rand and revenue in US$ this is increasing margins and profit.

2022 record group production of Vanadium products reflecting successful refurbishment of both plants and leading to lower fixed costs per kg.

Electrolyte manufacturing plant near completion with production scheduled for H1. This opens up a new revenue stream for a high value product just as demand for VRFBs is accelerating.

European vanadium prices have lagged behind US and China but have also been rising. Vanadium Pentoxide prices in Europe have risen 40% in 4 months according to vanadiumprice.com. Perhaps it is more than coincidence that Vanchem produced 211 mtV of V2O5 in Q4 out of an annual V2O5 total of 278 mtV. Diverting production and sales to the highest priced products and markets seems to me to be a very smart management decision.

BoD have reported buoyant demand for their products.

All things considered it is not surprising that there is growing interest in BMN. 2023 is looking very exciting for BMN and its shareholders. We know from 2017 / 2018 that the share price can rise very quickly once sentiment turns positive. And BMN appears to be in a much stronger position today than back then.

Just my opinion.

Sorry previous post should read:

“ A few days ago I suggested that a possible reason for the huge increase in V2O5 production at Vanchem (211 mtV in Q4) might have been to supply the electrolyte plant. However it was pointed out that this was flake not powder. I don’t know if flake can be converted to powder but assuming not then perhaps the real reason for switching to flake production was simply the higher prices. Smart move if so as those prices have continued to increase.”

Q4 not Q3

A few days ago I suggested that a possible reason for the huge increase in V2O5 production at Vanchem (211 mtV in Q3) might haven to supply the electrolyte plant. However it was pointed out that this was flake not powder. I don’t know if flake can be converted to powder but assuming not then perhaps the real reason for switching to flake production was simply the higher prices. Smart move if so as those prices have continued to increase.

The VRFB industry seems to be growing fast with regular announcements of new projects. If the increasing demand for vanadium electrolyte is driving the rising Vanadium price then this may indicate a sustained period of Vanadium price growth.

BMN is now perfectly positioned to benefit. They have completed two years of refurbishment and upgrade work at the Vametco and Vanchem plants. This has stabilised and increased production, and reduced costs.

At the same time they have been constructing an electrolyte manufacturing plant which will come online in H1.

So BMN is already profitable but is now seeing those margins increase. It would seem that everything is falling into place as it produces more Vanadium and will soon open a new revenue stream from electrolyte sales.

I expect a strong market reaction once solid profits become visible. Sentiment may push the share price up just in the expectation of that.

2023 looking very positive.

Just my opinion.

Vanadium price up
Rands per Dollar up
Volume up
Share price up

Not a bad day

One final point. Don’t forget that BMN hold in stock at east 800 mtV of market ready product. This would have a value of at least $32 million at $40 kgV (higher at current prices and doesn’t allow for Nitrovan premium)

I don’t believe it would be desirable or even possible to sell all of that stock for example to settle the Orion debt. It is needed to smooth out supplies to customers, cover non production periods such as annual maintenance and possibly supply the electrolyte plant once in commission.

However some could be sold to raise a shortfall in cash for debt repayment or simply as leverage in any debt renegotiations.

I see this as yet another signal that 2023 will be a good year for BMN and its growing Vanadium and energy storage businesses. No guarantees of course but huge potential for success and that must surely be reflected in the share price at some point.

Just my opinion.

That’s all from me.

Here is some more speculative food for thought but supported by numbers in the public domain.

ARC estimate all in costs to be $35 kgV in 2023 but remember that they also assume Dollar Rand to average of $17. It is already close to $18!

So in terms of profit the Group could generate $5 kgV profit at V price of $40. Highly speculative I know but assuming 4500 mtV annual production (and no electrolyte) that could generate $22.5 million profit.

If V price averages $45 kgV then profit may almost double, let’s say $45 million and the Orion payment is substantially met. The V price in 2 markets is already around $45 kgV !

If the rising trend for Vanadium prices continues then fill in your own potential profit. The growing VRFB market generating new demand for vanadium electrolyte suggests to me that over the next year we will see higher Vanadium prices.

And then there is potential revenue and sales from the electrolyte plant.

What no one can predict is the impact of load shedding on Vanchem production. The Group production number of 4500 mtV already accounts for a drop of at least 500 mtV from previous target. Steps already taken to reduce impact of load shedding may result in a higher output than the above number which in turn would increase profitability.

The huge increase in V price in 2017 / 2018 in my opinion was driven by factors less tangible and not as global as the current increase in VRFB projects. That makes me think that a higher V price than we are currently seeing is a high probability and likely to be more sustainable.

I am sure that few of the specific numbers given above will be exactly met. I don’t have a crystal ball and anyway that is not the point. I really want to make people think about where 2023 may take BMN in a scenario of rising V prices and a weak Rand. None of the assumptions are certainties but but based upon the available evidence the coming year could be a very positive year for BMN and its shareholders.

Just my opinion.

In the recent analyst’s report by ARC they assumed a V price of $40 kgV and a Dollar Rand rate of 17.00 to produce an un-risked NAV of 16.5p per share and a risked NAV (x 0.7) of 12p per share.

However both those numbers have been exceeded already. In both US and China (aka Asia) vanadium price already around $45 kgV and in Europe will soon be $40 kgV if as seems likely the rises continue. If we assume over the next year an average V price of $45 kgV (quite conservative given current trends) and a Dollar Rand of $18.00 (close to the present value) then those numbers change substantially upwards.

This would produce an un-risked NAV of 27.8p per share and a risked NAV of 19.46p per share using the numbers from ARC report. Factor in big improvement in sentiment once clear how debt is dealt with and who knows where this share price could rise too. That suggests an increase of 300% on the current share price. Some investors might find that an attractive proposition.

Production and electrolyte sales due H1 should impact on revenue profit and sentiment too.

Of course there are a number of assumptions included but whatever the exchange rate and V price over the next year it should produce a higher share price, possibly a much higher one.

Not a prediction, just a little positive food for thought.

My opinion only

Eatstocks I tend to post about the mining and processing side of the business and my opinions are based upon facts taken from RNSs, interviews, etc which I often include in my posts. I think it is fair to say that I have a reasonable knowledge of Bushveld Vanadium and feel qualified to comment on its operations.

As far as BE is concerned it is still very early days and I don’t have anything like the same knowledge and understanding of its activities. Specifically I have not researched electrolyte pricing and therefore had nothing to add to the conversation. It was a thought provoking debate and experts like yourself provided some interesting perspectives. It won’t be long I am sure before specific details of pricing begin to emerge. I am happy to wait.

Your bullsh*t ‘explanation’ for why I did not participate in that discussion was part of a shameful and unprovoked attack on me which came as something of a surprise. So whilst I recognise that you have made some good contributions to the bb I also have to acknowledge that you are a tw*t and I have nothing to gain from reading any more of your comments.

For that reason you are filtered. Hope your investment here comes good.

Eatstocks what are you doing. Have you had a brain f*rt?

HMHG until you apologise for your blatant lie 48p etc or present evidence then shut up child.

Lindon I guess I am someone you targeted with that comment “ It got buried under all the troll and click baiter responders posts (;as normal!) ”

Let me tell you that I don’t appreciate that. You may have a different opinion to me as to whether the trolls should get away with constant negativity and lying. I respect your view. Please pay me the same courtesy.

I relish filling this bb with reminders of the huge progress being made by BMN whilst at the same time exposing how stupid these people are. And I will continue to do so.