For those running around like headless chickens over the Vanchem purchase I would remind you all that when the first Vametco acquisition was announced a bridging loan of $11 million was arranged. The acquisition was completed on 06 April 2017.
The bridging loan and all fees associated with it was paid off on 15 June 2017.
The Vanadium price was around $28 kgV !!! Lower than it is today, yet the $12 million (including fees) was paid off in less than 2 1/2 months.
This time we not only have Vametco profits to pay off any small loan, but also the profit from Vanchem's almost 1,000 mtV pa too.
If any one thinks this is anything but a great acquisition then in my opinion you have gone beyond brain dead. There really is no hope for you.
For anyone worried about the Competitions Commission, Vametco also had to go through the same process. It is normal.
Remember BMN is delivering exactly what Cyril Ramaphosa wants. There could not be a better synergy between a business plan and Govt policy.
Just my opinion of course.
UK please read again my earlier posts re Ebitda in H1 plus Q3 profit. I think the bulk of the purchase will be from revenue. Any debt will likely be paid off rapidly, as with the Vametco deal. The upgrades at Vanchem will be spread over time and again much of the cost self funded. Just my opinion.
Bausch what are you talking about? The company is still making serious money. Didn't you read the H1 numbers?
The company is performing very well. It's the sp manipulation that is the problem. Long term the prospects are very exciting in my opinion.
Any AIM company that turns a 2017 net loss into a 2018 net profit of $49 million, with $42 million in cash at year end and no debt and at the same time is investing in increasing production has to be taken seriously by the investment community.
It's not really a question of will the same profits be generated in 2019. That misses the point. It is a demonstration of the very high quality of the management team. And as I have frequently stated that is what I invested in.
There is no reason whatsoever to believe that the BoD will do anything but keep delivering on their business objectives and plans.
All looking very exciting for 2019 / 2020
Just my opinion.
Slightly revised post. Original lost when a thread was deleted.
Mandela was an inspirational leader. A hero of mine.
What would Mandela think of Fortune Mojapelo and BMN? Clearly I am not capable of reading his mind or even thinking on the same level as the great man. However here are some thoughts:
He would be delighted that the new owners of Vametco are investing in the plant and providing over 400 jobs.
He would be delighted that under the Black Economic Empowerment scheme 26% of Vametco (and the profits) go to BMNs local BEE partners
He would be delighted that most of the sales go abroard, bringing very important US $s to the SA economy
He would be pleased to learn that BMN are not only planning to purchase Vanchem and secure its future with feedstock from the Mokopane vanadium mine, but also that this will secure the jobs at the plant and provide even more under the expansion plans.
He would be delighted that BMN / BE are progressing plans to develop a VRFB and electrolyte producing industry in SA, providing more employment, and of course helping to modernise the electricity supplies and bring reliable power and light to remote communities through solar / energy storage facilities.
He would recognise the astonishing achievements of this BoD and would acknowledge that suitable remuneration was well deserved.
He would be delighted that employees were receiving a share of the profits. (Compare that to the late stages of Evraz ownership.)
Yes I believe Fortune Mojapelo and Nelson Mandela would have a lot in common. Both men of vision working towards a better future for South Africa and its citizens.
As an extension to this discussion, Cyril Ramaphosa was elected Secretary-general of the ANC in 1991. This is what Nelson Mandela had to say about that:
"Cyril Ramaphosa was elected secretary-general, evidence that the torch was being passed from an older generation of leadership to a younger one. Cyril, whom I met only upon my release from prison, was a worthy successor to a long line of notable ANC leaders. He was probably the most accomplished negotiator in the ranks of the ANC."
So Mandela approved of Ramaphosa, and Fortune Mojapelo has shared a stage with President Ramaphosa and is delivering exactly what the President has set out in his plans for SA. In my opinion Nelson Mandela would most certainly approve of BMN and Fortune Mojapelo's considerable achievements.
As always just my opinion.
To demonstrate BMN's exceptional performance in 2018 the company made a gross profit of $95 million and a net profit after tax etc etc of $49 million (compared to a net loss in 2017 of $892 thousand). That is an amazing turnaround.
The company ended the year with $42 million in the bank and NO DEBT !!!
In H1 of 2019 Ebitda at Vametco was $48.6 million (BMN owns 74% of Vametco). Thus the stunning financial performance of this company continues to generate the revenue that will fund the majority of the Vanchem deal from internal profits with a relatively small proportion funded most likely by debt funding. That debt will be paid off in very short time from both the profits from Vametco and of course the significant profits generated from Vanchem's own production of almost 1,000 mtV pa.
BMN already has a track record of delivering exceptional value to those LTHs that had the patience. In my opinion the next 18 months has the potential to deliver similar exciting returns. The mining and processing side will certainly play its part through the Vanchem acquisition and any further increases to production at Vametco, together with low production costs. And let's not forget that the mining licence for Mokopane, one of the world's largest high grade vanadium projects, is imminent!!!!!
Any significant developments with Bushveld Energy are likely to have a very positive impact on sp.
All looking very exciting.
Just my opinion.
Raised our effective underlying interest in Vametco from 59.1 per cent to 74.0 per cent in September 2018
· Raised over US$20 m in an equity placing at 10.3 pence per share from experienced mining and UK institutional investors
· The best performing FTSE-AIM Materials stock
· 3rd best performer on the FTSE-AIM All Shares Index
· Revenue of US$192.1 million (2017: US$ 2.8million)
· Adjusted EBITDA (reported as operating profit before depreciation) of US$101 million
· Total cash of US$42 million as at 31 December 2018 (31 December 2017: US$9.7 million) with no debt (31 December 2017: US$7.9 million)
10.08.19 interview FM and MN corrected
(Part 1) "You have a very interesting platform from the battery's point of view. You've got world class upstream vanadium mining and processing assets in SA, quite an interesting downstream business and vanadium leasing and the potential to go into batteries themselves. Can we just start with a summary of the upstream business? Can you give a brief overview of what you've got in terms of your existing assets?"
FM "Sure. Our asset base of mines and processing facilities are based in SA on the Bushveld Complex. We essentially have 3 key assets: Vametco, Mokopane and the Brits project, and in addition to those 3 we have recently announced the conditional acquisition of Vanchem. I'll give you just a quick summary of what each of these assets are.
Vametco is our flagship asset. It's an integrated open pit mine and processing plant and its production base last year was 2,560 mtV. This year we have a guidance of 2,800 to 2,900 mtV, and it has the potential to grow to 4,200 mtV pa over the next 3 years on the back of an expansion programme that we are running.
Then we have the Brits project which is an extension of the Vametco mine. We declared a Resource there recently. The grades are about 1.58% V2O5 and the resource size of the Brits project is approximately 67 million tonnes. Between Vametco and Brits we have a resource base of approximately 260 million tonnes resource.
Over and above that we have the Mokopane project. We have the PFS that we completed and we have a mining right on this project which is imminent. The resource is 298 million tonnes of vanadium and the Mokopane project is intended to be a primary supplier of ore to Vanchem which will be our 4th asset once we complete the acquisition of that plant which we announced earlier this year.
Vanchem itself is a processing facility which currently produces about 1,000 mtV pa and the cost of the refurbishment at a cost of about $45 million will grow to 4,200 mtV pa. In total what the portfolio has is 3 deposits which combined have a resource base of 552 million tonnes with top tier vanadium grades of between 1.58% and 2.02% V2O5, together with 2 processing facilities that combined post refurbishment, our investment and expansion plans at Vametco, are anticipated to produce 8,400 of Vanadium over the next 3 or 5 years.
A really solid upstream set of assets. I would just add that at Vametco we produce a product called Nitrovan which is used by steel plants around the world for strengthening steel. Vanchem will allow us to diversify the product range to also include V2O5, vanadium trioxide, vanadium chemicals as well as FerroVanadium. So between those two processing facilities we will be able arguably the broadest range of vanadium products in a single company
And that's just the mining and proceeding part of the business. Amazing.
Expert it would appear that you are unable to see beyond the day to day share price.
I totally agree with Gambit. The company has made amazing progress over the last few years. I am very happy with that.
More importantly I believe the future has the potential to deliver even greater expansion of the business. If you don't understand that then in my opinion you shouldn't be investing in this kind of stock.
Of course the fall in V price and its impact on sp have been disappointing, and the blatant manipulation of sp is disappointing, but that will change over time as the company delivers on its plans. However don't confuse that with progress made by the company, which has been and continues to be exceptional.
Just my opinion.
Paludina in my opinion the results of your research are some of the best posted on this bb. Irrefutable facts of great help to all of us. Brilliant job and I will risk saying a huge thank you on behalf of all of us.
Stodgy I think H2 looks rather exciting for BMN.
From my perspective in H2 we already expect the conclusion of the Vanchem acquisition which adds nearly 1,000 mtV of vanadium production to BMN portfolio literally overnight, and judging by Fortune's words we may well see granting of the Mokopane licence which opens the way for preparations for mining there. We know that production at Vametco has increased in line with the company's forecast so that should continue into H2, and that costs have reduced, further aided by a fall in the Rand. And that is just the mining and production side of the busines.
Any developments on the BE side would be a bonus. That could include announcements about deals with battery producers etc as has been hinted at.
All the evidence suggests that the company is making good progress and therefore H2 performance should exceed H2.
If of course you are referring to revenue then my crystal ball doesn't tell me what the V price or sp will be through the remainder of H2, but logic suggests both should increase based upon analyst comments about V market and the impact of the above on sp.
Just an opinion. Hope it helps.