RE: Upward Trend15 Apr 2016 10:11
Been watching BMN lately and a post of the chatboard catch my eye...
"Courtesy of NickDarby
A reminder of six possible valuations for the Company….
A) Let’s value the vanadium at an ‘in the ground valuation’ of 1% of the retail price.
Using our scoping study price of $16,500 per tonne:
That gives us 2,023,000 tonnes at $165 per tonne - $333.795m.
Our share is 64%, giving us $213.6m – using an exchange rate of 1.42 that gives us around 31p per share.
That’s ignoring all the other assets!
B) Let’s take 1% of the retail value for all of our assets.
Taking into account our share of each resource and the recoveries expected, the retail value of the vanadium, iron ore, tin and phosphate comes to over $30 billion!
If we assume a fair value of just 1% of this figure, it would give us a market value of $300m, around 43.5p per share.
C) Our vanadium resource is considerably better than TNG’s resource. TNG’s broker note from Breakaway research gave them a fair value of £330m. Our vanadium -
1) Is around 3 times the size of TNG’s.
2) has much better grades.
3) Is most likely the lowest cost vanadium resource in the world.
4) Requires significantly less capex than TNG’s resource (US$262m vs A$970m).
So logically, after we have published our DFS next year and have got a few offtakes finalised, that must give BMN a fair value well in excess of £330m! (That’s in excess of 68p per share!).
D) Brandon Hill Capital
They have just valued us at 33p per share excluding everything except Mokopane vanadium.
E) Edison’s last broker note.
They valued our vanadium and iron ore at 49p per share. Bear in mind that this only included our initial 52Mt vanadium resource (now 298Mt) and around 9.3% of our iron ore resource. It also excluded our tin, phosphate, coal and of course BMN Energy and Brits vanadium because they weren’t around then.
F) Assuming we obtain a brownfield site, we could be generating minimum profits of around $80m pa as early as next year.
Imagine the market cap based on a PE of say 10.
It would be a around £1.16 per share! Let’s half that figure to take account of some dilution, giving us a potential of 58p per share.
Even going back and just looking at the Phosphate .
We have 442Mt at 3.6%, with recoveries in excess of 50%. This gives a retail value of around $1billion. This generates huge early cash flows for anyone buying the P&Q deposit, before mining of the iron ore begins.
Even the tin is probably worth a minimum of 3p per share as shown in my post earlier this week.
What about BMN Energy which is planning on being one of the largest VRFB suppliers in Africa by 2020. Have you seen the African potential for VRFB’s…….. It’s huge!
So looking at things quite conservatively, we have potential values somewhere between 31p and 68p per share.
Imo, we do appear to be incredible value for a market cap of only £11m and around 2.25p"
.... obv this is a long term play but even short term it is looking alright, with recent double bottom bounce its had a nice lift today. Possible trade up for grabs or view for a long term investment.
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