BMR Mining Share Discussion Threads

[atino] 01/3/2017 09:30

[1/3/17] Starvest RNS

A sustained recovery in the sector is apparent with continued improvements in our portfolio companies such as BMR Group (ending at 5.6p on 30th Sept 2016 up from 4.5p on 30th Sept 2015)...


BMR Group plc (www.bmrplc.com)

BMR Group is a new acquisition during the year which has undergone some recent management changes.

A forensic audit under the new management team determined a company holding at the historic Kabwe lead-zinc mine as a priority target for future development and the company's ability to generate revenue.

The mine closed in mid 1990s and tailings tests showed combined grades of approx. 18% lead-zinc JORC compliant resource from a 2004 report: 160,000 tonnes Zn and 260,000 tonnes lead JORC compliant with additional 190,000 tonnes zinc and 79,000 tonnes lead non-JORC compliant calculated.

BMR raised £414,000 at 3p in February 2016, a further £395,000 at 4.25p in April and £620,000 at 6.7p per share in October. It has approximately $1M in cash. A $3.5M loan facility was signed in November 2016 for plant construction with the plant commissioning expected in H1 2017 and first sales by H2 2017. It is expecting an 8-9 year equipment lifespan. The local work force is experienced in mining and a stable power supply is already in place.

Work has concentrated on developing an acid/brine leach involving zinc cathode technology to extract lead and zinc in the tailings. Recovery rates are between 80-90% and they are expecting to process 5 tonnes/hour 24/7, with just over 37,000 tonnes per annum running at 80% capacity. The processing plant equipment is currently being sourced with a total CapEx of $2.7M. It is expected to be fully operational by early 2017. ZEMA (environmental licencing) approval is already in place. Production cost is roughly $150/tonne of tailings. The expectation is that this will reduce in future.



Interests in Base Metals and Agricultural Products

BMR Group plc (www.bmrplc.com)

In October 2016 the company reported that laboratory scale testing was completed and recoveries of circa 85% zinc and 91% lead were achieved. It also reported that the sulphate brine leach process recovered approximately 90% of the contained vanadium, currently calculated at 9,000 tonnes and that current market prices for the resulting vanadium pentoxide product stand in excess of US$15,000 per tonne.

In September 2016 the company entered into a finance deal with Africa Compass International Limited for US$5.2M to aid construction and plant processing facilities. The deal is interest free and repayable 12 months after the final milestone has been reached.

With a new board and management team in place engaged in establishing the processing plant over the next 12 months, BMR looks set to continue to add value to its share price during 2017.

[cyberbub] 01/3/2017 09:11

To be fair though, they are only moving it (especially the lead... zinc isn't quite as poisonous) to other places?The lead sponge will go into batteries across South Africa probably, and the lead in the breeze blocks will eventually (no house lasts forever does it?) form thousands of small house-sized hotspots of lead poisoning, rather than a single massive hotspot? Arguably it would make more sense to move 180k people from Kabwe to a new town say 50km away. At the cost of basic houses (probably a lot better than most Kabwe residents have now), say 30k houses at $1000 each, plus infrastructure, say $80M, that might be a better solution long-term?I think the economics here look great, but let's not pretend that the eco credentials are excellent.Just my view.

[fireball xl5] 01/3/2017 09:08

We are all of the same opinion there QS. A damming indictment of the last attempt in the post project report. No sustainability, funds not used wisely and lack of coherent policies. Let's try again and this time create an all inclusive plan to meet the objectives.

The previous project and those instigated by ZCCM-H could be called cover ups. Put soil etc. on top of toxic waste.

[ljchandler] 01/3/2017 08:56

Nice one mate :-)

Very true

[qsmeily456] 01/3/2017 08:49

Posted this comment Lee

The world Bank should hold their heads in shame as should the Zambian Government........as I see things a UK tailings processing company called BMR will soon be clearing those polluting piles of historic lead cleaning up this site better and faster and cheaper than all the years of so called action and money spent and wasted by the World Bank .....disgusting!
The world Bank should be helping such companies do it quicker and clearing hurdles etc

[qsmeily456] 01/3/2017 08:30

Wow hats off chaps.....what an intelligent thread this is and Lee is even back!

I agree the reason we are 7-8p is

Unproven process
Uncertain cost cash position
ZEMA permissions
JORC
History
Unknown low profile AIM company
Low mkt cap
No institutional.investors

Excellent work thanks LOLsss

[ljchandler] 01/3/2017 03:11

hxxps://www.equaltimes.org/poisoned-profits-decades-later#.WLY7z_nyiUl

[stav5001] 28/2/2017 18:39

QS

The sage of BMR!

Share buyback and dividend!

Yes, This is how BMR Group can really reward loyal LT investors who were the backbone that made all of this possible, we are not history, we are still the lifeblood of BMR.

This strategy is also very attractive to income seeking new investors, who do not know where to get a return in today's low interest rate environment.

[stav5001] 28/2/2017 18:20

Being In the Top ten most toxic locations on earth, is not a winning line.

Most sizeable resource players would not touch kabwe with a barge pole, this is one of the reasons why a minnow like BMR initially managed to get hold of the asset, and reassemble the Kabwe mine site.

However, this is a double edged sword as the latent potential is mind boggling if the resource is effectively stripped of its valuable, although contaminating components at today's prices.

Oh, and then there's the Kabwe site, Kabwe mine, with potential for the discovery of another poly metallic pipe like the original Kabwe, and STAR ZINC up the road!

The benefits of a real environmental cleanup, with high profitability would transform the past negativity into a project worthy of global acclaim!


Who Dares Wins.

[fireball xl5] 28/2/2017 17:53

There is only so much one can put in and we are only numbered in the 1000. The numbers are not as complex as the metals and now we have cracked that shell its time for making money. I have been fairly conservative, its nice to have upside and to manage expectations. Not a long way to go until its all verified and the it produces 24/7 with no cuphics. Glad to see we are both on the money cyber. Still at 28p and 4p EPS that is a return!!! 14% and we ain't even started!!!

[cyberbub] 28/2/2017 17:31

If BMR is such a good bet, why were only 10% of the outstanding warrants at 7p taken up?

Are most people who held the warrants thinking (or knowing? surely not... such things don't go on do they?) that the company is short of cash and a placing is in the works, at say 6p?

Just challenging people! You know what they say about something that seems too good to be true....

[cyberbub] 28/2/2017 17:28

Hey Fireball, I see you were getting your calculator out at the same time as me! LOL

[cyberbub] 28/2/2017 17:27

Simple maths.

24 hrs a day x 340 days say x 5 tons per hours = 40,000 tons per annum. Cost = 40,000 X 120 = $5M plant operating costs per year.

Average 9% purity across both Pb and Zn say, so 40,000 × 0.09 = 3,500 tons of each. Split the Zn into 5 makes 17,500 tons of ZSH x $1300 per ton = $22M revenue. [That volume of ZSH ties in well to the 15,000 tons figure quoted in the latest RNS].

As for the lead, I have no figures, let's ignore it completely along with the vanadium.

So that would be a gross profit of around $22M - $5M = $17M p.a. from the WPT Zinc alone.

Knock off 5% royalty from the $22M makes gross profit say $16M.

Then knock off administration costs (£1.2M from the last accounts, say $1.5M) = $14.5M.

Knock off 30% corporation tax = $10M for shareholders. Say £8M, or 4p EPS. Put it on a modest p/e of say 7 and that makes 28p share price.

That's not including any lead or vanadium.

What am I missing here? Are investors thinking there is a risk to the plant coming on stream? I have seen some references to a dispute with ZEMA? Is Zambia seen as risky? Is the WPT seen as risky given that it only lasts for a relatively short time?

Any info appreciated.

Cyber

[fireball xl5] 28/2/2017 17:10

No that includes the V. I was however more conservative but lets be liberal for once and use the new content number LOL!

Zinc Lead V
Tonnage 40320 40320 40320

Content 10.66% 7.21% 1.61%

Yeild 0.78 0.88 0.6

Tonnage Output 3352 2558 389


OpEx $120 input

Sales PER Tn $2,800 $2,300 $21,000

$9,387,077 $5,883,914 $8,179,315 $23,450,306

Total Direct -$4,838,400

$4,548,677 $5,883,914 $8,179,315 $18,611,906



Royalty 5% -$241,920

Administration -$3,500,000

Profit before Tax $14,869,986

Tax 30% -$4,460,995.66

Net $10,408,990

$ 1.25 £8,327,191.90

EPS 189006233 0.044057763P

[qsmeily456] 28/2/2017 15:19

I assume this excludes the VAN balls. So are you saying the £5-6m comes above the obligation to pay the £750k PCM back? LOLsss

[fireball xl5] 28/2/2017 13:44

QS - we will only get a handle on the ACI finance cost when we see revenues. I think a lot of the ACI deal is to secure tonnage. There has been a significant tightening in concentrate availability over the last few months. Zinc stocks are also falling on the LME, apart from a couple of movements in this month but nothing like last year.

[fireball xl5] 28/2/2017 13:37

Blimey, life in the BB yet LOL's. The numbers are extremely good and the V a very large Cherry on top. At current yields, thruput, market prices, royalty and tax rates we should be looking at £5.6m+ full year of processing. I have only factored in the Zinc price not the ZSH. That's allowing for 4 weeks of downtime and £2.5 admin costs. Well its only an EPS of 3p.

[qsmeily456] 28/2/2017 13:33

This is why I think AB might have been keen on raising other finance. Anyone excel modelled all this to show antipathy net profit for BMR after ACI obligation LOLsss

[lastoneout] 28/2/2017 13:15

the RNS said "minimum" so sounds right

[lastoneout] 28/2/2017 13:14

yep that's how I would see it - a discount to the prevailing spot price.

[kryptonsnake] 28/2/2017 13:11

Surely the ACI off take agreement has some flex in the price? We wouldn't want to sell Zinc at $2000 if you could sell for $3000 on the market. I would have thought they will just get a discount on the current market price, maybe 20%?

[lastoneout] 28/2/2017 13:05

Indeed. Going back to the original question I doubt we'll ever see a price list as that would be commercially sensitive info but IIRC an RNS did say the ACI deal would bring in a minimum of $750 000/month. This suggests some deep discounts but we get a $5m interest free loan with flexible repayment options for that so can't grumble. Also that doesn't include V and was when Zn/Pb were around $1800/ton so the bulk of the price rise will be going into BMR's bank account you would hope!

[qsmeily456] 28/2/2017 12:30

I think you'll all find its 5tonnes an hour 24hrs per day less operational down time.

So do the numbers based upon that with a cost of $120 per tonne LOLsss