The company completed the acquisition of 90% of Enerox from Cellcube on 3rd Aug.
Now a little over a month later, Enerox signs a deal with @AusVanadium (AV) for a range of products, that on first glance, overlap BMN's own dealings with Enerox.
2/13
To know BMN is to know that what looks a distant uncertain promise, is usually far more nailed down than the official words suggest and this is yet another example of that.
3rd Aug RNS ;
"In line with BEL's VIP strategy to hold minority investments in VRFB companies,"
3/13
"it is seeking to procure third-party investors into EHL to assume BEL's funding responsibilities in terms of the SPA."
"Should EHL not have funded Enerox an aggregate of €3.7 million by 31 December 2021, then the Seller will have the right to buy back"
4/13
That deal is still to be realised but after today's announcement, the idea that the party(ies) isn't already involved, can be discarded.
I'm of no doubt that this deal with AV has happened because of BMN. Vanitec will have seen to that.
The fact that it has been concluded,
5/13
prior to what will be a majority and therefore controlling party, coming officially on board, says a lot about where BMN's plans truly are, compared to what is in the public domain.
RNS 3rd Aug ;
6/13
"Bushveld will be awarded a right of first refusal to supply vanadium products to Enerox"
However, Australia is a very long way from South Africa, so it makes absolute sense to drive the Enerox business, with a like minded local vanadium player, in need of support.
WIN/WIN
7/13
AV receives the necessary drivers to support its mine development and VRFB ambitions, Enerox gets local V supply to bolster its competitive edge in Australia.
First refusal isn't all about conquering every corner of the earth.
8/13
What's more intriguing is the message that ;
"AVL will also assist Enerox with the arrangement of electrolyte leasing on project specific demand."
If its happening in Australia, then its going to happen in South Africa as well.
Most importantly, what this deal make up
9/13
points towards, is future localised VRFB manufacture in Australia, just like that planned in S.A.
All Enerox needs is the level of business to justify it.
I was already pretty sure Enerox was the route to the Eskom BESS programme, now I am certain.
BMN's about much more
10/13
than 1 grid scale VRFB programme in S.A. but its difficult to ignore, what a serious contract win with Eskom will trigger, within the BMN business.
Annual Report page 31, 2020 objectives ;
"Investigate the business case for South African-based VRFB assembly"
11/13
Knowing BMN, that investigation has long ago taken place. The key is sufficient local business to deliver the business case and the Eskom BESS Project, is capable of being the beacon for it.
Land that big contract and then see just how soon the other cogs start turning.
12/13
Its truly great to see @AusVanadium begin to realise its dream and years of hard work, to get its mine and plans into business.
Whats more, its even more rewarding to see the VRFB value chain spread its geographical wings, with BMN once again, driving the heart of it.
13/13
BMN is a slower burner than many long term holders ever appreciated but what's key, is that it is burning.
The VRFB revolution is moving forward and one day, a trigger will come, that allows the market to appreciate just how big a story BMN truly is.
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1/16
It's difficult to call this market but my view is that assuming no more operational glitches #TGR now steadily re-rates as the operations sign off the various stages to 30ktpa.
2/ Front-end valuations should depend on where graphite prices go but as Syrah demonstrated yesterday (graphite fines not large flake) orders are buoyant.
Forward orders there running at 90,000 tons which are 50% of their current yearly output. So substantial.
3/ Note also Syrah cannot produce for less than FOB C1 $543/t even at 15,000 tons per month output and that's fines.
It is clear after last night's presentation that TGR C1 costs have also risen but this is to be expected in this current market.
1/12
Here are Verde Agritech's expected sales targets for 2022 which were revised in May and offer a significant read across to #HMI and what it can achieve this year and also.
1/9 In a previous #HMI thread, I highlighted that the $600k write-down in the FY2021 accounts meant that trade debtors (so effectively trade receivables) almost doubled between YE 2020 and YE 2021.
1/18
I've been running an extensive exercise on Verde Agritech also a relatively new but expanding fertiliser producer based just c. 70km from #HMI in Minas Gervais in Brazil. The results to date are rather fascinating and certainly worthy of review.
2/ Verde is a TSX-listed producer with a current plant capacity nearly double the size of HMI (0.6Mtpy) but with a phase 2 expansion due to come online in 2023 which would take output to 2.4Mtpy.
So a much bigger operation to come and soon.
3/ Those that remember my 5th July numbers on #HMI sales prices will perhaps remember that they demonstrated a $53.20/t average sale price for 2021.
At the average achieved AUD/BRL for 2021 of 4.054, this equated to an average price of BRL216.
1/7 Based on what I have just talked about if #HMI had received all the monies from its sales in 2021 then this would have amounted to $4.52m and the business would have been profitable at the operating level in 2021.
2/ What's more, the $4.454m paid out in 2021 reflects more accurately the true costs to run the business over the course of one year.
One cannot conclude exactly how much HMI produced in 2021 because the cash receipts reflect payment dates and not when the goods were received.
3/ Inventory was fairly minimal which reflects an operation that leans towards producing to order.
However, the costs associated with administration clearly eat up the vast majority of this with the consolidated statement accounting for c. $3.85m in the period.