Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Is £1 in 7 years achievable?
Can Craig improve production and use the ongoing capital to invest further in the mining business to achieve FM’s target of 8,000 mt pa.
Will the retail price of vanadium in 7 years average $45 kg
Will the all in cost be reduced to $25 kg
If the above targets are met, the annual profit would be in the region of $160m
With a P/E of 12.5 would give a market cap of $2m and SP of £1
The above takes no account of electrolyte sales or income from Cellcube.
All highly speculative, but possible
HarChris
The key point is “achieving a Run Rate of 2500 by the end of the year. This means that if Vanchem produce 1800 tons for the year, and 210 tons of that were produced in the final month, the total production for the year would be 4500 tons, including 2700 tons from Vametco. However, BMN would also be able to claim they had achieved the run rate of 2500 tons per year in the final month (210*12=2520). Unlikely that 5200 tons would be produced in 2023.
Mustang paid Bushveld a backstop fee of $32,737, being 2% of the Primorus CLN + unpaid interest.
A further fee of around $28k will be due in relation to the latest RNS.
Circa 14m shares will be issued to Primorus over a period of 18mths and a further circa 17m will be issued as a result of the latest RNS.
Whilst it is disappointing that an additional 31m shares are having to be issued to cover the CLN’s, which may be released to the market over the next 18 months, we have to accept that, had Fortune not agreed this deal through VRFB-H, Bushveld would not have been able to meet its obligations to provide 50% of the funding for Enerox, due to the games being played by Garnet, and we would have lost all involvement in Enerox, which is destined to be one of the top VFRB manufacturers.
VRFB-H
I have been trying to get my head around the situation with regard to VRFB-H and, based on the RNS announcements during the past 9 months, this is my take on our VRFB-H, Mustang and Enerox holdings.
The original constitution of VRFB-H in April 21 had Bushveld with 50.5%, Acacia with 27.4% and Mustang with 22.1% holdings.
There were 4 investors in Mustang holding CLN’s to the value of $8m, including Acacia ($2.3m), Primorus ($1.5m), one holding of ($1.25m) and a final holding of ($2.95m)
VRFB-H owns 50% of Enerox Cellcube.
Recently Acacia swapped their CLN’s in VRFB-H for a direct holding in Mustang, resulting in Mustang holding 49.5% of VRFB-H. The consideration for this transaction was the sum of $10,548,945, satisfied by the issue of new shares (43,056,989) in Mustang.
Primorus has subsequently elected to convert their CLN’s ($1.5m) in Mustang into BMN shares, with BMN being issued with a Mustang CLN equal to the original investment Primorous made in Mustang.
The latest RNS confirms a further investor has decided to convert their CLN’s ($1.25m) into BMN shares and a further Mustang CLN will be shortly issued to BMN.
Mustang will pay a 10% premium on the value of the CLN’s issued to Bushveld, which for Primorus equates to $150k pa and, as at 02/09, a total accrued of $53k rising by $411 per day.
BMN will hold CLN’s in Mustang to the value of $2.75m which, with interest added, could be worth $2.845m (£2.474 @ 1.15) on the 28th October when Mustang is due to return to the market. If Bushveld convert their CLN’s to Mustang shares at 18p per share, as per the latest RNS, they will hold 13,743,961 shares.
Mustang originally issued 10m shares at 30p, giving an Mcap of £3m, and with the Acacia and Bushveld shares, the total shares in issue on 28th October could be 66,800,950, giving Bushveld a 20.57% holding in Mustang. This holding would provide Bushveld with an additional, indirect, investment in VRFB-H of 10.18%, and an indirect investment in Enerox of 4.95%.
With a direct investment of 50.5% in VRFB-H, resulting in a holding of 25.25% in Enerox, Bushveld will have a total interest of 30.2% in Enerox. Based on the value Acacia received for its VRFB-H holding, $10.5m, would put a valuation on Enerox of $77m, which Fortune recently stated was well short of its true value. Bushvelds holding of 30.2% would be worth $23.25m.
The full number of shares allocated from the bonus pot will always be lower than the total allowed due to the number of shares that are excluded as a result of them being traded in the current year. If we assume that 20% of the shares in issue are traded in the first 8 months of the year (252m), which equates to 1.5m per trading day, then this volume of shares in circulation will not be included in the bonus awards. This would reduce the number of shares issued to the bonus pot by 8.4m (252m/100x3.33) resulting in only 33.6m shares required (42-8.4).
Dilution
The only shareholders to suffer dilution will be new investors during the current year.
A shareholder with 500k shares out of 1.260b in issue has 0.0397% of the shares.
A shareholder with 516,650 shares, including bonus, out of 1.294b in issue has 0.0399% of the shares.
Conclusion
The issuing of bonus shares, to loyal shareholders, provides a return on their capital investment at no cost to the company, leaving free cashflow to be used to progress the company. This facility could be available each year, including 2022, alongside any dividend award or a replacement for a dividend payment. Shareholders would be able to choose if they wanted to retain the bonus shares or sell them on the open market. Opinions welcomed.
Should shareholders be allocated free bonus shares in lieu of a dividend payment?
The company dividend policy suggests that a dividend will be payable from free cashflow when there is sufficient available in excess of that required for normal business operations.
Some share holders would like to see a dividend paid to provide a return on the capital they have invested in the business, and to cover expenses/tax bills that need paying without having to sell any of their shares. Many fund managers only invest in shares that pay dividends and could be a source of significant institutional investment should the company commence paying a dividend.
However, many share holders would prefer any free cashflow to be retained in the business to fund future developments and increase production or to pay down debts.
Both views are equally relevant but is there a way that both camps could be placated, and are shares issued to long term shareholders, as a loyalty bonus, a possible answer.
Dividend Payment
With a total of 1.26b shares in issue, a 1p per share dividend would cost the company £12.6m.
A shareholder with 500k shares would receive a dividend payment of £5k.
Loyalty Bonus Shares
If the company were to issue bonus shares, say in September, to award LTH’s I would propose them to be issued based on the lower of shares held on the 31st December and 31st August.
If a shareholder had 500k shares on both these dates, then bonus shares would be allocated based on that holding. If the shareholder had purchased additional shares during the current year and had 700k on 31st August, the value at the 31st December, 500k, would be used for allocating bonus shares. If the shareholder had sold 300k of shares in the current year, then the allocation of bonus shares would be based on their holding at 31st August, 200k.
In September the company would need to decide how many bonus shares were to be issued and a possible calculation could be based on the level of dividend payment they would have paid. In this example we are looking at £12.6m and, at the time of the award the share price could be 30p, this would equate to issuing 42m shares, (£12.6m/30p) which would provide 3.33 bonus shares per 100 shares owned (1.26b/42m). Therefore, with a share holding of 500k, this would give bonus shares of 16,650, (500k/100x3.33) which if sold at 30p, would provide a return of £4,995 (16,650x0.3) in line with the potential dividend payment. If the share price at allocation of the shares was 50p then the same calculations above would be carried out, resulting in only 25.2m shares being allocated in the bonus pot.
Faramog - quite correct, thankyou, which makes it even more sensible to invest now.
Somtam - as an example
If the shares are purchased for 10p and are valued at 17p in August when your son does a bed and isa, the shares would be valued at £34k giving a capital gain of £14k. After deducting the tax free allowance of £12.3k you are left with a taxable gain of £1.7k.
The basic tax allowance is £37.5k of which there would be a taxable benefit of £1.7k as above, which means your son could have income from other sources up to a maximum of £35.8k and only pay 10% tax on the capital gain - £170
Hi Somtam
If your son invested the £20k in a stocks and shares account now he could then do a bed and isa in August. If the SP increases to 16p by August your son will have made a capital gain of around £12k, which is just under the annual allowance of £12.3k, with any capital gain in excess of this being taxed ar 18%.
Bullish 3 yr fcast for BMN mining only, you may/may not agree with my assumptions and I would welcome constructive feedback on these figures to update the forecast accordingly
https://mobile.twitter.com/ThePickler54/status/1489140585290215428
Good morning
Below is a response to an email from Andrew posting on Telegram, which is very encouraging
My sincere apologies Andrew
I somehow missed responding to your email, as I in fact have been responding to investors since we finished the road show a few weeks ago, up until the past weekend.
There's a lot going on behind the scenes, that I can't share with you at this stage until its' released, including updates on BE.
We completed the first part of an institutional roadshow, and the feedback was consistent. They're happy with the operational performance since May, and they want to see that carried through to year end, and then they expect the share to rerate. The key essence is focusing on delivering operational performance and meeting our annual guidance. They want less noise and talk, and more performance, and then we will get more institutional support, which will reduce the share price volatility. This a philosophy I also tend to agree with.
Incidentally, we released a video done by Fortune after Q3 and we intend to do something similar with Mikhail on BE.
Having said that, we are coming up with another comms strategy on BE, using other media platforms besides RNS, to update the market on progress at BE.
So please bear with us. We're aware of the sentiment, but need to adopt a sustainable, consistent and performance based approach, which will certainly bear fruit in due course.
Looking at the list of major shareholdings, 59% is held by brokers on behalf of private investors, 10% held by institutions and 2% held by BMN, making a total notified of 71%.
Any thoughts on who owns the remaining 29% equivalent to 350m shares.
So it is now clear that Duferco have sold the 35m shares they held a year ago, after selling a few to drop below the 3%.
The result of slowly releasing these shares, into any potential rise, has possibly been to deflate the SP and allow Duferco to obtain a further 67m shares.
Had Duferco kept the original 35m then it is possible that the SP could have slowly recovered to around 20p at the time of the second tranche of CLN’s being realized. Had this been the case then Duferco would have been awarded a further 33m shares to bring their total to 68m.
By selling their initial 35m, and suppressing the SP, Duferco have ended up with the same number of shares but with also £4m in the bank from the sales – a nice result if this was planned.
To recoup the £100m they lost on the sale of Vanchem to BMN, Duferco need to now hold until the SP reaches £1.50 – would be nice if this was their plan.
Mogwhy - unless someone can produce a screenshot from a Bloomberg PC showing the total shareholding for Bushveld, we are all guessing as to whether they still hold.
In your last post you mention them getting 65m shares next month, that assumes a share price of 7.2p based on a CLN worth £4.7m - I think you need to revisit your calculation.