Bushveld Minerals – management deliver again #BMN
When I last covered Bushveld, I mentioned that I’d taken the difficult decision to sell my position in it at about 30p, due to the vanadium price collapsing.
But when the facts change I change my mind, and I have now decided to rebuy following the Vanchem plant acquisition that Bushveld has announced. (latest price 32p-ask, Market cap £360 million).
Vanchem acquisition unlocks Mokopane
Bushveld has created a presentation explaining their rationale for acquiring the plant. The main reason I have bought back in is that Bushveld just created a path to unlocking hundreds of millions of dollars in NPV from Mokopane:
As highlighted by Bushveld, Mokopane – Vanchem is robust even at lower vanadium prices. Bushveld’s PFS only included 63Mt even though the resource is 298Mt – which means the NPV should be significantly higher given the larger resource and current vanadium price.
Bushveld appears to have taken advantage of the lower vanadium prices to acquire an asset which transforms the business’s prospects.
Given that Bushveld’s investment proposition has changed, I now consider the shares significantly more attractive than when I sold. Bushveld’s management have once again delivered for their shareholders. Now if the vanadium price can just start to recover!
At the time of publication, the author holds a long position in BMN.