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I would also say no. We are being held back by big sellers, whether this is Duferco or Acacia not clear, and probably quite a few jumpy PIs. For any re-rate several things need to happen, gradual increase of price of V to $50+, company to confirm drop in production costs, progress on electrolyte plant, Eskom tenders wins , mini-grid news, rand to US$ improvement, large stakeholders reduce/stop selling.
Obviously some are outside the companies control and will probably occur at different times.
We still have big sellers lurking. Any rise has a big sell thrown into it. We do not know where Acacia are up to, they were selling down, Duferco may be finished (for now), and Orion CLNs are on the horizon but I only expect them to utilise a portion of these.
KS - Just the way the supply chain works with Vanadium. Now Musk is a different beast , he has been pumping and dumping Bitcoin and pumping his own crypto this Dogecoin. Very speculative and I do not class these as investments, just pure gambles. He has been in trouble for issuing fake news regarding tesla in the past, one of the most overvalued companies out these.
It will take a little time for the increases to filter through into the company accounts. It also depends how the companys arrangements are set up with clients and at what point in time any increases become effective. An example would be that our US customers could place an order today and it could take several months for that order to reach them. Worth remembering that the entire process will still be underpinned by Covid rules and guidance. It would be unlikely the company could issue a separate news release for this and will include and revised figures in the quarterly update. This is all they did in 2017/18 , at some point real investors will latch on.
These small steps are great news , no spiking in price just a gradual increase over a long period which is ideal. The last week has seen the European prices gain more traction. I posted on another thread the increase to price per kg based on these % increases.
Chine $37kg, Europe $33.75
https://www.vanadiumprice.com/
The Orion CLNs do get overlooked in a lot of the projections we see on here, far more time has been spent discussing the JSE listing (as an example) which is insignificant when compared to the Orion deal. I do think that the Orion deal was a lifesaver here, that will come at a future cost. We have a history of these large investors selling down and cashing in , after all their business is to make money first and foremost. Not all achieve this (Golden Summit, Obtala).
This is more of a concern to me than the price of vanadium. At least if that stagnates at current prices for the next 12 months we should be making a better profit next year due to decreasing operational costs after the revamp and increased production.
Uncle John, how does that (the sp going up quickly), square with the Orion CLNs? This overhang is on the near future horizon and just interested to see how you think this would work. Orion are going to want their paydays and will start converting at a profit for them.
The additional problem is the other RNS on Friday with another major holder, Acacia, selling down. That was needed like a hole in the head. We also have the Orion CLNs lurking and that is some overhang. I really think that Fortune thought the price of Vanadium would never get as low as it did and this has had a serious impact on profitability in the last two years. We can only hope there is a sustained increase in the price to upwards of $50/kg going towards Xmas.
James, I have been stating most of what you have covered, especially the tight margins as being one of the main reasons for the suppressed sp. I would add that there has been a general distrust and scepticism from past projections regarding failed production targets and the various initiatives that have been pushed back (JSE/Electrolyte plant, dividend,etc.).
We have to hope of an increase in the price of V, we know demand is there and expected to increase. The selling down by ii’s is more than unhelpful, not a lot we can do about it. We will have to see if there is anything further from Acacia. We also have to watch for movement on the Orion cln’s, a few comments around this today.
Faramog - The electrolyte plant will not be in full operation in 18 months time, the revised date of H22022, rather than August 2022, refers to the handing over of the plant. Full operation will take some time to build up. And obviously we need orders in prior to that. Earlier in the week I made a posting which stated the Q1 update will clarify whether construction actually started in February. A response to that by somebody supposedly ‘in the know’ hinted that everything was fine and it had started. These are the sort of misleading comments and misdirection which have now littered this board. That response got a like number of likes.
Regarding the JSE listing I recently corresponded with Chika regarding this and the official line is that it is “under review”. I was really trying to get to the bottom of the fact that we need to be listed on the main exchange here, the FTSE, but there was no response on this. I believe the main listing here is more important than the JSE listing, but it looks like this is some time off (if ever) , certainly not even imminent.
The issue of profitability on vanadium stales has been discussed many times on him. We really could do with the price of vanadium increasing another 30% to 40%. SP angel revised their target share price down to 31p earlier in the year based on the fact that the costs had increased to $20 and $26 for the two plants.
They have said the increase in production costs are a temporary measure based on the refurb. These should in theory start to go down. I note the costs relating to the Electrolyte plant have increased.