Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
Thanks Cc. Actually I've managed to answer my own question with the following from last week's RNS.
"As disclosed in note 13, the Mokopane license held by the Group requires that mining operations commence prior to the end of January 2021. As at 31 December 2022 no mining has taken place at the site. Based on the conditions included in the mining right, the Group has the right to apply for an extension to the requirements to commence mining activities and an application has been submitted to the Department of Mineral Resources and Energy ("DMRE"), however a response has not yet been received.
Based on the mining right conditions, including that the Minister has to give written notice regarding a potential suspension or cancellation of the mining right and that the Group has the opportunity to provide reasons to the Minister on why this should not occur and the remedies put in place, the directors are confident that the extension will be forthcoming and the license therefore remains valid. Consequently, the directors have made a judgment that no impairment of the related intangible asset with a carrying amount of US$53.47 million is required."
Elsewhere in the RNS it says the reason mining didn't start was of COVID related delays including the inability to engage with the local community in the way required.
Coffeecups - you say the Mokopane mining licence will soon expire. In Jan 2020 BMN, via it's Pamish subsidiary, was granted a 30 year mining right to Mokopane. These two statements clearly don't tally, so what the bit I'm not getting here?
HC - Does your $36 breakeven figure include everything e.g. finance costs?
It would also be interesting to know whether the $37.99 actual figure to date is gross or net of commission. That alone would make a big difference when margins are tight.
Making an average of $37.99kg/V this year as per last week's RNS is what is happening.....which isn't good compared to costs. The question is how to reconcile this actual with the 2023 V price numbers we have seen quoted for the US where the largest proportion of sales go and the Nitrovan premium we are supposed to be getting.
TB - yes, but $21.5m of the all in cost was increased impairment charges. This equates to $6/kgV per sold kg in 2022. These charges occurred and there will be some impairments in 2023, but they were especially large last year and did significantly raise the all in cost for 2022 so the all in cost picture for 2023 is already likely to be a lot better on this one feature alone.
Quickest signal the new CEO can give is to buy a shed load of shares with his own money (not company awards). Can have this sorted before 9am tomorrow if he wanted to.
What is also striking about the interview is FM's ongoing support for the new CEO and Bushveld projects. Indeed, he says that he looks forward to inviting the interviewer to the switch on of the minigrid next month. He's also very positive about BEand VRFBs. These aren't the words of someone leaving BMN in the very near future or someone who has been unceremoniously ejected from his CEO role against his will. My suspicion is that he's getting a holding pattern role for a while and then going to take a senior role in BE/Mustang. His departure may be a lot more voluntary than I previously thought.
Earlier today there was unsubstantiated speculation that FM was offloading his BMN shares. In addition to the point others made that this would necessitate an RND as he's still CEO and a director, he still won't be able to immediately sell his shares once he leaves these roles as he will be in possession of way too much insider info about really short-term share price sensitive matters (2q production, Orion restructure, Mustang/BE, etc.). Some time will need to pass before he's deemed to be sufficiently distanced from these or they've become public knowledge. Also, given his enthusiasm for ongoing BMN projects and his obvious confidence in the business prospects why would he sell if he can see a share price multiples higher than today in the not too distant future?
HMHG - who confirmed it would be renegotiated?
Yesterday there was some speculation about whether Orion would want to renegotiate the terms of the deal, particularly around the 6p share conversion element given the most recent share price falls. Looking back, the share price opened and closed at 3.62p on May 4 which was the day before the RNS so Orion were already prepared to accept the need for the share price to grow 66% to be in the money on this element. Now they need 100% growth. However at the time of the deal they will have already known the 2022 results were poor and that they would be (reportedly) forcing FM out - both of which were likely to provoke a share price fall - so they'd have factored this into their calculations when agreeing the deal. To me, this suggests they will not look to renegotiate this element of the deal.
Thanks, Witty. A good article. I'd also recommend the two vanadium articles linked at the bottom of the one you posted.
The last 5 years have been very tough as a BMN shareholder, but I genuinely believe we are about to turn several corners in quick succession in the directions of operational stability, production growth, global vanadium demand, vanadium pricing, and VRFB take-off.
Maybe they were learning from past experience and were cautious in their modelling i.e. demonstrating that the cash flow model held up on more modest and gradually increasing volumes. Plenty on here - cindercone especially - would have lambasted them for their naivety if the cash flow model only held up for production at capacity with no allowance for production issues.
Given the 1Q23 production issues and the shift of maintenance to 3Q, it is reasonable to think that 2Q and 4Q are where the majority of this year's production is now planned to be delivered if the annual target is to be met. We know 2Q got off to a good start and the fact that yesterday's RNS reiterated the annual guidance (plus what we now know about the recent lack of load shedding impact) strongly suggest the rest of 2Q production was good and on plan.
ARC - Kirkwood only recently became chairman of the BOD so he would have had less power than now. Whether or not his own support for FM substantially changed recently, Orion probably read him the riot act and left him little option.
Two other factors 1) most significantly, it may have been a recent shift in support away from FM by Acacia or Orange Trust that meant FM could now be ousted. These are major long-term shareholders and getting rid of FM without their backing may not have been practical 2) other BOD changes over the last 18 months may have shifted the dynamics of ousting FM.
Yes it is non-binding at present and they can change the terms until it is binding if they wish (most obviously if something comes to light that gives them greater concern, but in theory for any reason). However Orion are a serious mining finance company and they are not going to allow BMN to RNS a deal agreed in principle that Orion have not done their homework on, nor are they going to allow their staff to be quoted in such an RNS unless they approve the wording, or change their minds because their CEO is in a bad mood one morning. Making themselves look like f00ls is not their intent. Therefore, based on what they'd seen to that point they were sufficiently satisfied with BMNs financial plans for the period of the new terms and that should reassure investors.
However I also agree that 1) until the deal is signed off then BMN is in serious short-term financial jeopardy of going under 2) once signed off, BMN is still has a long way to go to re-establish market confidence that it can consistently deliver on its production and financial commitments year on year and that any mishaps are minor compared to the successes. I would also say that if BMN ever, ever, ever again leads a results/production RNS with the safety record above the production or financial data then it's goodbye to my holding as that is not the mark of a credible company.
And when Orion and BMN agreed the recent restructure in principle they will almost certainly have had NDA access to the draft 2022 accounts, will know the 2Q23 production though to the end of May and the June outlook, and the sales and pricing data to date for 2023. Yes, they will want to do due diligence on the numbers, but they would not have agreed the deal terms unless they were confident the financial outlook met their risk requirements.
Wrong HC. Read note 3. It makes it clear that a) the liquidity issues are 12 months from today and are not dealt with b) it explicitly states additional - as yet not in place - funding is needed on top of the Orion resolution.
However, as the RNS comments about the short term liquidity and inability to meet 12 month obligations concerns highlight this better than anticipated cash generation is still inadequate to meet ongoing needs. Further financing (i.e. dilution) will be needed so expect this to weigh on the share price until it is resolved.
Yes, good time for a change. Get the feeling that Acacia and Orion ran out of patience with FM. Hopefully the new CEO will improve operational consistency and shareholder communications for the better and bring a greater sense of urgency and lack of tolerance for underperformance that we've seen over the last 5 years.
I'll be more surprised if we don't get back to 40p in the next 18 months than if we do......
In last year's AGM Fortune was re-elected by 151m for votes to 27m against votes. He has very strong support among major shareholders and so you are wasting your time (and ours) agitating for his removal.