Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi Libero
I concur with your calculations and show below where my figures come from. I have had to estimate the figures for the 26/10 as I was too late to download them - all data taken from sharesmagazine trades.
Interesting to see how the volume has tailed off through this week .
Date Value Trades Avg
26-Oct 450,000 3,450,000 13.04
27-Oct 426,886 3,292,799 12.96
28-Oct 782,287 6,417,096 12.19
29-Oct 382,881 3,242,270 11.81
30-Oct 551,417 4,808,518 11.47
02-Nov 426,520 3,811,226 11.19
03-Nov 237,614 2,011,792 11.81
04-Nov 286,119 2,277,897 12.56
05-Nov 203,633 1,642,158 12.40
06-Nov 153,340 1,243,749 12.33
Total 3,900,697 32,197,505 12.11
Taking into account the 5% discount brings the actual price down to 11.51p - as per Libero's post.
Using the dollar exchange rate of 0.76 to the pound at 5pm today, converts the $6.5m to £4.94m
This would buy 42.9m shares, with a total issue of 1,195.9m and giving Duferco a 3.59% holding.
Good morning all
If someone is keeping a record of the trades actioned for BMN, could you please let me know the total number of trades and total value of those trades for Monday 26th October.
I have been able to download all trades from the 27th only and I am looking to calculate the 10 day weighted average.
Thanks
Just trying to get my head around the Duferco deal hopefully summarized below.
BMN agreed a revised purchase price of $57.5m with $30m cash paid on completion, $2.5m deferred and CLN’s issued for the remaining $23m.
50% of the CLN’s are due for redemption on the 7/11/20 and the remainder on 7/11/21
BMN have negotiated to settle the first redemption with $5m cash and $6.5m (£5m) in shares
The SP will be based on the average weighted SP for the 10 trading days prior to 7/11/20
If we assume an avg SP of 12p, that equates to 42m shares and a 3.5% holding
If the second redemption of $11.5m (£10m) is redeemed in shares at an average SP of 25p, this would equate to a further 40m shares being issued to Duferco and giving a total holding of 6.6%.
I would like to think the SP would be considerably higher than 25p in November 21, which would result in fewer shares being issued and a lower holding %.
Looking back at the RNS for the end of the 2019 financial year it is shown that there was an independent valuation of Vanchem carried out to establish, under IFRS 3 rules, a Fair Value Calculation of the assets purchased from Duferco. This resulted in the assets being re-valued at $118m and a “Bargain Purchase” adjustment of $60m added to the company profits for the year.
Had BMN agreed to pay the “Fair Value” for the assets at $118m, this would have required an additional payment of $60m, which BMN did not have, and would have probably resulted in a placement of 230m shares at 20p and giving a holding of an extra 16.5% and 21% in total when the CLN’s are taken into account.
Duferco must surely have realized the true value of Vanchem and appreciated the vast potential for BMN, particularly with the inclusion of Vanchem. Have they agreed to sell the business cheap and accept CLN’s knowing that they will recover way more than the loss incurred on this deal, and has the BOD been happy to hold off on any news to allow Duferco to realise a higher number of shares.
There is a concern among some investors about the low value of the SP and how Duferco are going to benefit from this but, if you consider the above, shareholders may end up with a 6.6%, or less, dilution whereas they could have ended up with a 21% dilution if Fair Value was paid for Vanchem.
I believe that this is another masterstroke by Fortune to protect shareholder value and I also believe Duferco will retain their shares, until they reach at least £2, to recoup the $100m shortfall between the price they paid in 2008 for Vanchem ($160m) and the price they sold to BMN ($58m)
Most of the above is based on research of the BMN RNS files and questions/opinions are just my musings.
Would welcome others thoughts on this.
Hi gambitxjs
Just clicked on your link but only subscribers have access to more than one paragraph.
Any chance you could copy and paste here for all to read.
Thanks
Is it possible to fulfill the CLN’s at the end of October without incurring any dilution?
If the current share price (12p) is still available at the time the $11.5m (£8.85m) becomes due, BMN would need to issue a further 74m shares which would give Duferco 6% of the business.
If the share price could be encouraged to return to the pre Covid 19 level of 24p then only 37m shares would be needed resulting in Duferco having 3% of the business.
If BMN were to instigate a shares buy back process with the aim of purchasing 37m shares over the next 50 trading days (750k per day), with the expectation of the share price gradually rising to 24p, this would result in having sufficient shares to hand to fulfill the CLN’s without any dilution to the existing share holders. The share price would need to increase by an average of 1.45% per trading day to reach 24p. This would also mean that the shares purchased by BMN would increase in cost over this period to an average of 17.45p and resulting in BMN paying £6.5m to acquire the shares.
Alternatively, if BMN are aware of who is selling down their shares, could they come to an agreement to purchase 37m shares from the seller at today’s price - £4.4m. Hopefully with the release of an RNS to this effect and the end of the seller releasing chunks of shares, the SP will gradually return to 24p in time for the CLN’s to be fulfilled, without any dilution.
I fully appreciate that BMN want to hang on to their cash to grow the business, but if there was any likelihood of a 1p dividend being paid next year, cost £11.5m, perhaps shareholders would be happy to accept a 0.5p dividend instead to ensure future dividends are not diluted.
METHODOLOGY GUIDE FOR BATTERY SOLUTIONS INDEX
The WisdomTree Battery Solutions Index [referred to as “the Index”] is designed to track the performance of companies primarily involved in the Battery and Energy Storage Solutions (“BESS”). The Index was developed by WisdomTree Investments, Inc. (“WTI”), in collaboration with third party specialists at BESS. BESS can be defined as technology that captures electrical energy in chemical form. These technologies are positioned to benefit from the fact that both, chemical and electrical energy, have an electron as the carrier, which limits the conversion loss.
To be eligible for inclusion in the Index, component companies must be under coverage by the market management team of the third-party independent index calculation agent, must list shares on eligible stock exchanges and be classified as BESS company.
Companies need to have market capitalization of at least $250 million and an average daily dollar volume of at least $1,000,000 for each of the three months preceding the Screening Date (after the close of trading on the last trading day in April and October).
The Index classifies the BESS value chain into 4 categories (i.e., Raw Materials, Manufacturing, Enablers and Emerging Technology), partitioned into 12 sectors, which are further divided into 37 sub-sectors19.
Raw Materials - companies that focus on raw materials mining, such as Lithium, Nickel or extract chemicals for instance Lithium Carbonate, Cobalt Chemicals specifically used for BESS.
Manufacturing - companies that process materials, cell, pack and build components such as Anode, Cathode for BESS.
Enablers - companies that develop the building block components for BESS such as grid edge or charging infrastructure.
Over the weekend I found details of an ETF that was only launched in February this year investing in battery solutions as detailed below.
BMN do not, currently, meet the criteria for investment from this fund as they are not classified as a BESS company, do not have a dividend performance and have a market cap of less than $250m.
One day, in the not too distant future, BMN will be eligible under the above criteria but, unfortunately, will probably still not be included in the fund as, incredibly, the experts (Wood Mackenzie) do not seem to recognise Vanadium as being a material specifically used in BESS.
WISDOMTREE ISSUER PLC BATTERY SOLUTIONS UCITS ETF USD ACC (GBP) (CHRG)
Fund Investment Objective
The WisdomTree Battery Solutions UCITS ETF (the “Fund”) seeks to track the price and net dividend performance, before fees and expenses, of the WisdomTree Battery Solutions Index (the “Index”).
The WisdomTree Battery Solutions Index was designed in collaboration between WisdomTree and energy storage market experts Wood Mackenzie (“WM”) to track the performance of companies primarily involved in battery and energy storage solutions (“BESS”).
To be eligible for inclusion in the index a security must be involved in one or more of the following BESS categories: raw materials, manufacturing, enablers or emerging technology. Within each group, an intensity rating is assigned to each company which captures the perceived degree of a company’s overall BESS involvement across categories. Each company from the BESS universe is also assigned a Composite Risk Score, which is made up of the Quality and Momentum factors, each carrying an equal weighting. The rebalances are on a semi-annual basis.
Hi VV
I think your %’s are a little out
Gross Margin % is usually calculated based on your profit as a % of sales
So with Bushveld you have $11 profit on sales of $29.5, which equates to a margin of 37.3%
Hochschild would be 32.8% and Barricks 29.5%
Happy to be corrected.
Just a thought
Did the company release the full year results a few days early to allow the markets to absorb the data prior to the Weekend.
This would then allow for a more detailed RNS update on BE contracts/pipeline to be released on Monday in time for the Vanitec meeting.
MN would then have the perfect platform to expand on the RNS during his media briefings after he has chaired the meeting.
Hi all
Today’s RNS has the following statement
“Timing of the JSE listing has been impacted by the covid 19 pandemic.”
Are the words HAS BEEN instead of IS BEING significant
Does anyone else read into this that there is no more reason to delay a JSE listing and news may be coming soon?
Extract from an article in today's Telegraph looking at Unicorn replacements.
BMN would appear to have the main characteristics of a Camel company but also the ability to change from Black to White like a Zebra company - moving between Vanadium Rebar and VRFB Electoliye.
VCs have come up with a new kind of animal to describe their perfect investment. A camel. A strong, resilient beast which, with its own water in its humps, can survive an amazingly long time without any form of nourishment.
They have also started to hunt down zebras: swift, adaptable animals that fit into their environment and can be both black and white at the same time depending on what the situation demands. Camels will be very different from unicorns. They will have cash, instead of burn rates. They will have profits rather than scalability. They will have roots as well as ambitions.
Likewise, zebras will be able to pivot and adapt, tweaking their business models, and creating new ones, as markets change and demand from consumers switches from one product or service to another.
In truth, these kinds of companies will be far better suited to the economy that is going to emerge over the next few years. There won’t be so much easy money around.
Central banks might still be printing the stuff like crazy, but it will be hoovered up by governments to pay for the damage the pandemic has done. Borders may take a long time to reopen and markets will become more national.
You won’t be able to scale your idea globally even if you wanted to. Sharing will be treated with suspicion.
And customers, staff and suppliers will want to work with businesses that are rooted in particular places, and haven’t just descended on a market with an expensive app, lots of money to spend, and not much in the way of profits.
Camels might be slow, but they will generate their own cash, preserve what little they have, and get through some lean years with patience and fortitude. They will survive this crash, and any others that come along – and over the next few years durability is likely to be the most important quality a company can have.
VCs might sometimes devote a bit too much time to the latest hip phase or trend. They can be faddish. But they are also very good at sensing the way the wind is blowing, and picking up on a change in the climate before anyone else. If they weren’t, they wouldn’t be very good at their job and wouldn’t have any money to invest.
Investing in camels is the right decision for a world that has been reshaped by Covid-19.
If the economy had a few more of them, it would be in better shape – and certainly better than simply relying on lots of cash-hungry unicorns.
Try again
Date..... 30k...... 50k ......100k...…. Total Units
6...…. …..0...…... 4...…….. 1...……... 300k
7 ………..1...…… 5...……. 4.............. 680k
11...….. 14...….. 14...……. 4...……. 1,520k
12............6...…… 9...……. 2...……….830k
13...…… .3...….. 11...….. 16...……. 2,240k
Are we finally getting to the end of the tame seller.
I have been doing some analysis of the trades for the last 5 trading days, particularly with respect to the unit sells for
30k, 50k and 100k and calculate that the trades at these values total 5,570,000. You can find a breakdown of the number of trades for each day/value below
Date 30k 50k 100k Total Units
6 0 4 1 300k
7 1 5 4 680k
11 14 14 4 1,520k
12 6 9 2 830k
13 3 11 16 2,240k
Out of the 16 trades today for 100k, 8 of them were traded between 2:30pm and 3:30pm, with no impact on the SP.
It would be nice to think that we are getting to the end of this blatant manipulation and the SP will be allowed to rise to its natural level.
Emily Marshall, spokeswoman for the developers, Hive Energy and Wirsol, said safety was "at the heart" of the farm's design and a battery safety management plan has been agreed with the Health and Safety Executive, as well as Kent Fire and Rescue Service.
"Cleve Hill Solar Park offers a low cost, safe and low carbon way of delivering clean power to thousands of homes and provides a real opportunity for Kent and Swale to meet their zero carbon obligations," she said.
"If built, it will be able to generate up to 350MW of clean, renewable electricity able to power over 91,000 homes. The project won’t require any Government subsidies and aims to be one of the lowest cost generators of electricity in the UK.
"If built, it would also provide over £1 million of revenue to Swale and Kent Councils each year for the lifetime of the project. The solar park will deliver a 65% increase in biodiversity on the intensively farmed site by including open grassland and meadow areas, hedgerows and woodland."
Decision not due till May 28, plenty of time for Invinity to propose a VRFB alternative
Full Telegraph article referred to by DaddyBigBucks @ 07:56am
World's largest solar farm could cause explosion on scale of small nuclear bomb, residents complain
Developers want to erect up to one million solar panels the height of a double-decker bus on farmland in a picturesque Kent village
The proposed development at Cleve Hill near Faversham, which would cover 900 acres of farmland Credit: Richard Knox-Johnston/Richard Knox-Johnston
Building the world's largest solar farm in a picturesque Kent village could cause an explosion on the scale of a small nuclear bomb, residents have complained.
Developers want to erect up to one million solar panels the height of a double-decker bus on 900 acres of farmland, the equivalent of 600 football pitches, at Cleve Hill near Faversham at a cost of £450m.
They would have the capacity to power more than 90,000 homes using energy from what would be the biggest battery storage facility in the world - and three times bigger than the lithium-ion battery built by Elon Musk, the Tesla tycoon, in South Australia.
But thousands of campaigners say the battery facility, which would cover 25 acres, is unsafe and their idyllic village would be decimated if there was a battery fire which could not be controlled.
Lithium-based batteries are filled with a highly flammable electrolyte which, if it catches fire, can ignite combustible material nearby.
These fires have "an explosive energy equivalent to a small nuclear bomb and the potential to spread lethal gases", the Save Graveney Marshes campaign website claims.
Richard Knox-Johnston, vice president of the Campaign to Protect Rural England (CPRE) in Kent, told The Sunday Telegraph: "The battery storage envisaged has caused fires and explosions around the world and CPRE is concerned that this application could be approved without any safety consideration being taken into account.
"The size of this storage is five times the current largest similar battery storage in the world and poses unacceptable risks. It is equivalent to 602 tons of TNT, which is 1/20th of the TNT equivalent of the Hiroshima atom bomb."
Helen Whately, MP for Faversham and Mid Kent, said the scale of the development would have a "devastating" impact on the lands which inspired Charles Dickens and Daniel Defoe.
"We’re not talking about a few fields - this would destroy an entire landscape," she said. "I want to see us reach net-zero by 2050, but this should not come at any cost."
Professor Sir David Melville, from the Faversham Society, added: "It's only a mile away from the local primary school and a couple of miles away from Faversham. This is far too big a risk to take at the level that we currently know about these batteries and their safety, and we haven't had the reassurances that we need from the government."
Alok Sharma, the business secretary, is due to make a decision on the development by May 28.
Having just been investigating the share listing and noticed that there are 3% of the company shares not in public hands. This equates to 34m shares - are these being held back to allow SA investors to purchase when listing on the JSE?
Just checked on the Bushveld website, should have done this earlier.
The top 10 shareholders show the following 4 not listed in the earlier posts.
Halifax (£120m), Interactive (£118m), Barclays (£35m) and Equiniti (£34m) - total £307m
This brings the total listed on this thread to £905m, which equates to 78% of the shares in issue and with 3% of shares not in public hands, that leaves 19% unaccounted for.