Sp Angel Conclusion on Bushveld Minerals news today : If we assume the current spot vanadium price for the year and the potential US dollar rand rate based on the average to date and the spot price through the rest of the year we could see attributable cash flow of US$168m for Bushveld for the year.
Bushveld Minerals* LON:BMN 18.7p, mkt cap £201m – Vanadium production expansion on time and within budget
BUY – Target 25p
(Bushveld Minerals controls and holds an effective 59.1% of Vametco)
- Bushveld Minerals report completion of Phase two of their organic vanadium expansion project on time and within budget .
- Phase Two raised production to 3,750,tV from 3,035mtV for just $2.5m with Phase Three targeting a production rate of around 5,000mtV.
- These targets are met through the expert work and diligence of the first-class team at Vametco who deserve much credit for their industrious ingenuity and practical application.
- Bushveld is set to see a significant uplift in profits this year as a direct result of the rise in production, lowering of unit production costs as well as persistently higher ferro-vanadium price levels
- The US dollar SA rand exchange rate has averaged 12.29 year to date but has depreciated recently 13.86 and could record 13.08 for the year if the current spot price is maintained
- Vanadium prices remain persistently high at around $73.5/kg of ferro-vanadium fob Europe and around $72/kg fob China (Metal Bulletin).
- We currently estimate that vanadium prices should average US$49.91/kg for the year though we may need to revise this estimate higher. This estimate gives an attributable free cash flow of some US$52m based on the 13.08 rand rate.
Spot price vanadium assumption for 2018
*SP Angel forecasts: Figures based on 100% of Vametco plant. Bushveld now hold an effective 59.1% of the Vametco plant
*An SP Angel mining analyst and nomad have visited the Vametco vanadium mine and processing facilities in South Africa.
DISCLAIMER
This note has been issued by SP Angel Corporate Finance LLP (“SP Angel”) in order to promote its investment services.
This information is a marketing communication for the purpose of the European Markets in Financial Instruments Directive (MiFID) and FCA’s Rules. It has not been prepared in accordance with the legal requirements designed to promote the independence or objectivity of investment research.
This document is not based upon detailed analysis by SP Angel of any market; issuer or security named herein and does not constitute a formal research recommendation, either expressly or otherwise.
The value of investments contained herein may go up or down. Where investment is made in currencies other than the base currency of the investment, movements in exchange rates will have an effect on the value, either favourable or unfavourable. Securities issued in emerging markets are typically subject to greater volatility and risk of loss.
This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.
Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. This information is for the sole use of Eligible Counterparties and Professional Customers only and is not intended for Retail Clients, as defined by the rules of the Financial Conduct Authority (“FCA”) and subject to SP Angel’s Terms of Business as published or communicated to clients from time to time.
It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. This document should not to be relied upon as authoritative or taken in substitution for the exercise of you own commercial judgment. SP Angel is not responsible for any errors, omissions or for the results obtained from the use of the information in this document.
This document has been prepared on the basis of economic data, trading patterns, actual market news and events, and is only valid on the date of publication. SP Angel does not make any guarantee, representation or warranty, (either expressly or implied), as to the factual accuracy, completeness, or sufficiency of information contained herein. This document has been prepared by the author based upon information sources believed to be reliable and prepared in good faith.
SP Angel, its partners, officers and or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).
SP Angel Corporate Finance LLP is a company registered in England and Wales with company number OC317049 and whose registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP. SP Angel Corporate Finance LLP is authorised and regulated by the Financial Conduct Authority whose address is 25, The North Colonnade, Canary Wharf, London E14 5HS and is a Member of the London Stock Exchange plc.
