Member Info for SickOfTheRatRace

When the results first came up it was 88% Vanadium. Guess we were all clicking!

Many thanks I will do some further research on this.

@Raz10, strong sell?

The question on that is whether BMN would decide to account for Mokopane/Brits and Vanchem separately. At Vametco it is easy because it's all on one site, with Vanchem they could take the decision to treat it as a separate sub company ("Bushveld Vanchem Limited") which is able to purchase raw material from other parts of the group with each site being a separate mining entity with it's own cost base. Initially from the point of takeover there is going to be a transition period between the current (as yet undisclosed) ore source and material we mine ourselves so input cost in that period would just be a material cost rather than all the associated costs of mining.

I am not an accountant in the slightest but as investors we would of course like to see the numbers presented as simply as possible. I know from past experience that group structures like this seem to be the preferred way going forward as it makes disposals and acquisitions out of and into the group much simpler, with the parent company providing group wide functions (HR, IT, Finance etc) as a service.

@BBN I read with interest your comments on Vanchem profitability for BMN potentially being higher than Vametco.

Is this because at Vametco it is an integrated mine/production facility therefore 26% of profit goes to the BEE partner, whereas if Mokopane is mined then the BEE partner would receive their 26% share based on the cost of mining with a margin for sale of ore and not 26% of the Vanchem further processed FeV etc sales price? I have read many times on this board over the years that only mines have the 26% BEE requirement and as we know Vanchem is not a mine.

Appreciate that different mining locations and rights may currently have BEE ownership values other than 26%, I just use 26% as a standard based on the outcome of the new mining charter and for simplicity for this discussion.

The company said that they can implement a policy that meets capital needs and encourages capital efficiency whilst rewarding shareholders. As they are best placed to know how much capital is available that's more than good enough for me. I really don't buy into this argument that dividends/capital requirements have to be mutually exclusive for any given period of time - the company will be working to a roadmap over several years of business planning and it is perfectly possible to do both.

As the policy is now only weeks away, there isn't too long to wait.

@Dav3J The dividend policy is just a policy not necessarily a commitment to pay any particular sum on any particular date. Therefore capital requirements for Vanchem should not affect the release of said policy. All the policy is likely to say is that the company expects to return x% of annual profit to shareholders and it would be the x% that would be subject to debate. It shouldn't also affect the ability of the board to turn round one year and say things didn't work out as expected so we can't pay it, or we had a bumper year so actually we are going to pay more as there are less demands from capital projects just like any dividend paying company that has either cut or increased their dividends.

Presentation now live, time to catch up!

https://webcasting.brrmedia.co.uk/broadcast/5cc315de3c8e41495e2420cb

Well I trust everyone is continuing to enjoy this business building equivalent of Game of Thrones. Another outstanding deal that will pay for itself quickly whilst simultaneously providing Mokopane processing at a fraction of the original expected cost.

This massive jigsaw of the BMN story just slotted in another few pieces. Like Game of Thrones books will be written about BMN and Fortune.

How incredible to be a very small part of this incredible journey. Good luck all.

The main reason for mentioning Wogen is because at present we don't know the current situation on the ground and can only speculate. Perhaps Wogen have already communicated to BVL along the lines of "hey, to be honest we could sell 4,000mtv a year tomorrow if you could supply it".

Alfa yes I agree. I cannot see a situation where the company would desire to expand production for a market where there would be no buyers. Of course said buyers will have production facilities geared for a particular production level. The unknown questions for us are twofold:

1. Are Wogen being pressured by downstream customers for more supply and are those demands being passed on to BVL?
2. Are our US based customers taking whatever they can from Wogen and making up the shortfall from elsewhere using alternatives to (patented) Nitrovan?

Previously it was mentioned by the company that existing purchase arrangements are informal and they would be looking to put at least some contracts in place. Of course we need to add to that expected BE demands for material so there will be some balancing going forward. If for example we didn't immediately sell increased production to Wogen but started stockpiling it ready for the electrolyte facility then any increases are welcome but that would add significantly to our production cost figure until such time as BE were able to pay for it. That's not so much of a problem if it is in the same accounting year.

(2 of 2)

That for me at this stage of development is much more preferable to a very high EBITDA for 2018 then a figure much lower in 2019, which is what we would have had if production had met expectations. That may surprise some, after all why not make as much profit as possible? However I could well imagine the hammering the share price would take if 2019 came in half of 2018. 2018 is what it is, but now we have a good base to build on with a steady increase over 2-3 years. There are many investors who prefer that level of stability.

However what this all means for me is that going forward we will see even more measured figures from the company, double and triple checked and certainly under promised. Assuming things tick along as expected and third parties don't impact, I would expect that this time next year we will be reviewing a 2019 performance level that exceeds the guidance figures put out in the coming weeks as the company will want to build in a very healthy safety margin. This should be a good boost, after all what investor doesn't like a company exceeding it's targets?

Going forward I see no current negatives. We can debate the past ad infinitum but I have every confidence that BMN have already learnt these lessons as painfully as we have.

(1 of 2)

Fortune saying anything other than "hoping" now would be a schoolboy error. What the time period since Vametco ownership should have taught everyone at the company is the need to never firmly commit regardless of how much you believe in the figure. Unforeseen events can always come and bite you on the bum and affect the figures and clearly they did last year. A good case in point was the reiteration of the phased production figure which then came in a third less primarily due to events largely out of the control of the company. Although never confirmed directly (but the Vametco manager moving on is a very good indication), I theorised at the time that Vametco management were spinning BMN a line regarding production in the vain hope they could improve the figures substantially when they were already well behind. Eventually something had to give and that led to Fortune having to inform us of the missed targets very late on and the poor sentiment that followed. I remember a conversation on this very board questioning the realism of the projected figure given that what we knew about the phased timescales would mean they would have to significantly exceed the projected figure in the second half of the year in order to meet the yearly total given they were starting from a much lower level in H1.

As they say, once bitten twice shy. Which is why I am not surprised in the least by Fortune being completely non-committal until such time as they have a level of confidence in the forward looking guidance and of course it will be just that, guidance.

Whilst high Vanadium prices were well received (by all producers) although we benefited with some incredible EBITDA figures imagine what could have been realised cash wise if that period of high prices was married with our highest to date production. As it stands our production was well down in a time of the highest market price. Great for protecting the figures overall but far from a best possible outcome - but it has the benefit of not over inflating expectations for the coming year where prices are more measured. As BBN has already posted the lower prices with higher production should mean we are on course for a similar EBITDA for 2019 as we will have for 2018.

I know some believe the company should just get on with the job and worry less about investor relations but I can't help wondering where we would be share price wise if we had our achievements coupled with the RNS management some others have. The fact is that a public company needs good investor relations and I still don't think BMN are anywhere near where they need to be (yet) but things are certainly improving with recent updates.

Fortune is human just like the rest of us. Although he is revered as practically a deity in some quarters for what he has achieved thus far (and this can be largely justified for some of the incredible deals that have been done) let us not believe that everything he does turns to gold, an early example of this for me being the Erongo deal.

The question for me is would another CEO have achieved everything that Fortune has achieved thus far and the answer for me is no. He isn't perfect and clearly taking on Vametco with a huge existing staff base has been a massive learning curve, but learning both he and the company appear to be and the next production figures should reflect that, purely based on shipment data alone.

I look forward to the Vametco numbers.

Me also. Some of this volume continues to be Bed&ISA transactions around the £20k mark which is a good confidence boost in terms of investor sentiment.

@kevkan I think it is early days for this. The RNS said "Initiated development" which indicates that they green lit the project recently. Indeed later in the RNS it states:

"Similar to the structure of the projects covering the electrolyte production facility and the Eskom VRFB, Bushveld Energy will continue using its cooperation model in developing and delivering this project. Cooperating partners will include project development and investment, project finance and engineering, procurement, construction and integration."

As they are talking about using partners in project development it says to me it is still at the planning/design stage.

However given the importance of the project both to the mine in terms of energy security and BE in terms of showcasing real world projects I would expect this project to be fast tracked as much as local logistics allow.

My opinion is that the report is from a third party and the third party has indicated they need more time to complete the analysis. The note in the Lemur update is to reflect that the company have been informed the analysis is not quite ready however they did say "may now be after 15th" so there is a possibility they will still meet that.

I don't like the delay but I do like the communication of it, hopefully this has been a lesson learned and improved communication of expected timelines will continue.

As usual the afternoon drop today has nothing to do with a positive RNS.

@RichKen one of the issues after a flurry of BBN posts is there isn't much left to discuss!

Nice problem to have.

Question for you though to stimulate some debate, do you favour spinning off like Afritin, outright sale or holding for income (possibly then using the project as collateral to secure other lending for Mokopane)?

Personally I think if this had already been spun off then the RNS today would have seen a significant rise in the share price.