Member Info for SquirtyFlower

Yesterday was a blue day not a red one and I think today is shaping up to be another blue day as well.

The chart is suggesting a bull flag pattern (it even says this below it) on a 4 hour chart. This is a classic chart pattern pointing to a further upward move over the coming days. The pole is made up of the green candlesticks of last week's sharp rise and the downward yellow dotted line is the top of the flag (a lower parallel line joining the bottom of the same candlesticks probably should also have been drawn to represent the bottom of the flag, but never mind). The key point is that the final 2 candlesticks for noon and 4pm today have broken out above the short downtrend of the last few days. This confirms the bull flag pattern and is why the chart pattern is seen as positive signal.

The right-hand % scale shows the Fibonacci retracement levels for the recent move up from 30p low to 39.5p high and what the chart is suggesting is that with the bull flag confirmed the next targets (i.e. possible resistance/turning points) are 39.5p, 43.2p, and 45.5p.

This isn't a comment on the merits or otherwise of TA as that discussion has been done to death over and over on here, just an explanation of what the posted chart shows for those who are trying to interpret it.

Compass - shares/money held in ISAs are always exempt from income tax, dividend tax and cgt. However they still form part of your estate and so they are NOT exempt from IHT by default. As others point out, there are exceptions to this, but the default position is they are subject to IHT.

Below the ***** I've re-posted something I originally posted a couple of weeks ago (which was based on shareholder analysis I posted in November 2018). The info is taken from the various presentations Fortune has made which usually include a slide on shareholder structure, the most recent being the early Feb presentations. The published info adds up to approx 67% of the shares so we don't know the disposition of the remaining 33%. We do know there are some other small II holdings (e.g Invesco, Amati, Hargreave Hale), we know First Island did have 2.99% but the consensus appears to be that they may be our more recent seller (but we don't know for sure), PIs using other brokers will hold some for certain, and we do know Peter Breese was a buyer of the March 2018 placing. However, clearly none of these holders hold enough to get on the top 10 lists so we're looking at up to 2.5% each (and I suspect the majority are scattered round other PI/SIPP brokers). Of course, almost everyone has a price, but YD, Acacia etc have all been hugely supportive for many years so I just cannot see how/why they'd even consider any lowball offer (i.e. under £1) and, even if they did and GS rolled over too, this still only represents
a little over 20% of the company and so a buyer would have to work very hard (i.e up the price big time) to get control of another 30%.

*****

The other thing which mitigates against a low-ball takeover is the share ownership structure. PIs hold at least 40% and perhaps up to 44.5% if Jose Borremeo's shareholding hasn't been transferred to a nominee holder (which I doubt, just can't see why he would do this now). Acacia and Yellow Dragon hold 12.5% between them (in Nov 2018 it was approx 15%), Golden Summit just under 6% and the BoD 3%. JoseB, Acacia and YD have all reduced their reported holdings over recent months but, apart from GS, there's no evidence of another major II buyer (i.e. someone sniffing around for a takeover).

Given this split of holdings, it is appears difficult for anyone to get hold of enough shares to easily mount a takeover. Less than 20% is held by the 3 largest holders outside PIs, so any buyer is going to have to pay a very, very significant premium to get hold of the 50.01% shares they'd need (and even if GS are predatory then it's still a huge hike from 6% to get where they would need to get to). We're unlike a lot of companies that have a large proportion of their shares held by a bunch of IIs who would sell their granny for a 20% premium, we've got no activist investors, and we've got no debt + huge profits/cash-flow so there's no bank pressure to agree anything we don't want to.

I'm not saying it can't happen, but imho it is highly unlikely and, even if it did, would take a huge premium (multiples) on the current share price to succeed.

Daisan - very true. In many ways, your comments add to rather than subtract from the business case for taking a stake in UET. Not only do we directly support/mitigate our existing business relationship with UET, we take a stake in their wider business before it attracts greater interest from the big players. I'm not saying we want to diversify away from SA or Africa ourselves - and we certainly don't have the spare people resources to get distracted from our current SA focus - but having a 5-10% 'silent partner' investment stake in their wider business may well prove a very lucrative longer-term use for some of our large cash pile as well as helping to directly cover our own back on their technology.

I agree that BMN/BE taking a formal stake in UET would be a very good thing as it would help to mitigate the risk that UET is taken over and the new owner decides to take the company in a different direction i.e. away from South Africa (or Africa more generally) and away from BE.

Radebe would have been less subtle about BMN/BE's prospects if he had 'Buy Bushveld Minerals shares now' written in 100 metre high flashing red neon lettering across the top of Table Mountain.

after all the downs and ups, this week is now going to just going to quietly fade away. Volume has been woeful in the last couple of hours.

You could still invest £20K as well as receive your £16K dividend.

Does the transcript record whether the HMS Invincible Captain was called Theresa, the Officer of the Watch called Boris, the Navigator called Jacob and the Radio Officer called Nigel? Paddy and Mick are a pair of Einstein's by comparison.

BBN - spot on. Powerful growth stories require both the vision for growth and the financial wherewithal to get there. BMN/BE have both of these by the 'shipping container'-ful. Ours is primarily an organic growth story too - we may take on some debt in time, but it is now largely coming from cash flows. Even more powerful.

As a reminder here is what I posted earlier this week and provides strong reinforcement of your comments....

Using an estimated 3000mtv production and $80/kgV price, ARC assess that for 2019 BMN will make from Vametco alone:

- revenue £184m (yes UK Pounds, not US dollars)
- operating profit £113m
- net profit £80m
- attributable net profit after minority considerations £58m
- EBITDA 117m
- EBITDA margin 64%
- Free Cash Flow £73m

All for an mcap of approx £430m or a share price of just 39p/share. Still a stunningly cheap bargain buy price (even if I've had to increase the mcap by £80m and the share price by 6p since Tuesday!).

The 2019 profit numbers are a 40% increase over ARCs 2018 estimates and the FCF estimate is a 6x increase over 2018. Simply staggering.....and remember these are based on very conservative production and pricing estimates

Pigpen - this must have been raised and put to bed a dozen times or more now. It is nothing of any significance or importance whatsoever. It just something this site has done for this and a number of other shares and all it has done is cause confusion.

gkb47 - perhaps you could educate fellow BB readers as to exactly which companies will fill the supply-deficit if BMN are unable to do so. Names, new production coming on-stream in next 2/3/5 years, evidence they have the necessary permissions and finance in place to achieve these plans, etc..

Altorque - look at his/her comments from 9-12th Sept and then look at the RNS history........

shorters bowels getting looser........

And now we've reached short squeeze time....wouldn't surprise me if we end up in the blue for the day and back over 40p by the end of the week.

chas - stick with it for up to 3 years and you'll have multiple opportunities to sell your BMN holding for at least £3 per share.

Agreed, the BoD's main job is to manage the Vametco plant/production improvements, manage the BE growth items, the financing, and get all the permits,licenses,etc needed for growing annual production to 10000mtv. The share price will go wherever it goes, but the BoD should focus on what it can control.

As for the money running out, I suggest espaol reads the ARC analyst report on the BMN website as it contains a few unpalatable truths for this/her assertion. For example, using an estimated 3000mtv production and $80/kgV price, ARC assess that for 2019 BMN will make from Vametco alone:

- revenue £184m (yes UK Pounds, not US dollars)
- operating profit £113m
- net profit £80m
- attributable net profit after minority considerations £58m
- EBITDA 117m
- EBITDA margin 64%
- Free Cash Flow £73m

All for an mcap of approx £350m or a share price of just 33p/share. A stunningly cheap bargain buy price.

SoulDoubt - your estimate could not be much further wrong.

The latest ARC analyst report puts the Vametco base case NAV for 2019 (i.e. using extremely conservative estimates) at 49.7p. They say this is likely to be conservative and provide a couple of tables giving various NAV estimates based on differing vanadium prices and exchange rates so, for example, at the current V price of $80/kg and USD/ZAR exchange rate of 14, the NAV would be 102p.

See page 9 of the report.
https://www.bushveldminerals.com/wp-content/uploads/2019/01/Vanadium-strength-drives-sharp-earnings-growth.pdf

This excludes any valuation for Mokopane. The latest company presentation estimates the NPV (9%) for Mokopane as $418million. See slide 9 of the following presentation.

https://www.bushveldminerals.com/wp-content/uploads/2019/02/February-2019-corporate-presentation.pdf

Lucan - a couple of other things to remember about dividends:

1) if you time the purchase well (I hate to say using techniques such as Technical Analysis, so I'll leave it at simply looking at the share price graph over time) you can buy the shares when they are at a temporary low price so you obtain a better yield than you would otherwise. Remember dividends are declared as a sum per share not a % per share so, for example, if I buy a share that has a 5p dividend for 100p I get a 5% yield, but if I buy on a temporary dip down to 90p I still get the same 5p dividend but on a 90p purchase (so a 5.55% yield).

2) Over time, companies typically increase the dividend so, in my example above, after a few years the dividend might have gone up to 6p per share so by then I'd be getting a 6.66% return on my 90p investment. Hold for 10 years and I may well be getting 9/10/11p+ per share - well over 10% annual return. Have a few of these in my portfolio and I could easily be getting 7% on average across the portfolio even if my most recent purchases are yielding 3-4% at the moment.