2/9 Given that in Sept IES signed an electrolyte rental agreement with BMN, it is important to keep tabs on their progress.
So its good to see that contracts running from closed through to "a strong chance of close in the immediate term" (upside), now number c. 57MWh.
3/9 That's good progress given the fact that the electrolyte rental agreement is only just being introduced and so has yet to really affect those numbers.
All that aside, my reading is that a clear move is being made to take advantage of the BMN cost advantages and
4/9 there's no better place to exploit that strength than in S.A.
We mustn't forget what Prrsident Ramphosa has recently doubled down on.
"energy self-generation projects above 1MW will be fast-tracked, to take the pressure off Eskom."
5/9 Here's that 1 direct ref. i was talking about.
"very high electricity tariffs are making a compelling case for such "grid defection."
Right now, IES numbers remain constrained but it is clear where we are now heading.
c. min. 285mtV in those 57MWh of IES contracts.
6/9 BMN have first refusal on vanadium supply to all IES projects, be it the rental agreement likely will seal many deals.
So we are talking c. 8% of expected BMN production in 2020 and that's before we add Enerox to the mix.
Not a bad start with exponential growth expected.
7/9 As IES says, these projects are being driven by such things as ;
"the need for rapid change to global electrical infrastructure, the amount of renewable generation that can be deployed is becoming increasingly limited without incorporating storage"
Add to this lower costs,
8/9 fear of blackouts, fear of climate change etc etc.
What we then see is a demand profil that in't being driven by economic success but by sheer need. So it sits outside any economic cycle, meaning it won't fall away.
There will come a point where the market will begin
9/9 to appreciate this diversification away from steel and the fact that BMN, with its first mover status, is/has created a vanadium business, that is shielded from the economic cycle of mining.
I don't intend joining for the rush, so i buy now and i wait.
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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.