|Quote "As the years winds down we are looking to complete the transaction"
Well worth watching|
|oh no more news so another down day|
|How long have you got...go to LSE BB plenty of research their|
|been looking at it...looks very cheap to me...whats the market like for vanadium? how important is it?|
|What the hell happened to this co?|
Published on Nov 15, 2016
Australian Vanadium Ltd is a vanadium focused company looking to take advantage of growth in the emerging battery storage market, specifically as it applies to grid-scale technology.
Managing Director Vincent Algar tells Proactive: ''Our strategy hinges around the battery market and the battery metals in that market. We have developed quite a unique vertical integration strategy within AVL and that involves working from the ground up with the resource, through the intermediate products in the battery market known as vanadium electrolytes ... all the way through to encouraging and developing sales marketing in the Australian market for vanadium flow batteries.''
''We're progressing our Vanadium project in Western Australia towards a commercial outcome, we're currently working on vanadium electrolyte production and building that capacity here in Australia'', Algar added.
He said the company's also taken an option in an interesting Lithium project in South Africa, ''We had been on the lookout for other opportunities in the energy storage space given our experience and understanding we've developed over the past six months and this project came up. I've obviously got a South African background with experience and relationships there so was not afraid to enter into the area''.|
|Where has dogrunner11 gone to? I was just beginning to enjoy his input here.|
|> And that really is my final word.
quote of the day.
all the best.|
|@Dogrunner11 I appreciate your view point and am not here to convince you any different. Nor am I here to rubbish Redt and if you have taken it as such then I am afraid that is your interpretation and not my delivery.
However, your decision to continuously refer to BMN as just another junior miner that needs cash and owns nothing is at best misguided.
BMN have signed a Purchase Agreement and paid 10% towards Vametco mine and processing plant, which generates 2.5% of the world’s vanadium supplies and has the best in-situ grades of vanadium in the world.
This plant has revenues of over $50m and in 2015, (the year of the lowest V205 prices recorded), still made approximately $2m gross profit post royalties and is debt free.
V205 prices are in 2016 up some 90% from their Nov/Dec 2015 low. Therefore, any rises in prices makes the plant even more profitable but the price stays the same.
You make a mistake if you think that this purchase is the equivalent of raising capital for a DFS or indeed that BMN are just another junior miner trying to make a splash. They are buying a processing plant with profits. So it’s not about securing finance, it’s about securing the best finance with the least amount of equity, because that sort of transaction in any sector, is one investors will be attracted too.
The transaction has a long stop completion date of March 2017. The reason this long stop date was chosen was to allow for S.A. regulatory approvals, which is standard for this sort of transaction. The CEO has since made it clear that the deal is a done deal and that finance is effectively secured. It is now a case of waiting for the deal to be finalised and announced.
You may not wish to hear that or indeed recognise that it is true, that is of no consequence to me but you undermine anything else you might have to add by ignoring this fact and continually attempting to throw BMN in with all the other junior explorers out there.
There isn’t another junior miner anywhere buying a profitable processor in a market that is seeing rising prices, nevermind the level of price recovery taking place in vanadium this year.
If all of that were not enough BMN have a demonstration project of multiple MWh which they state will be one of the biggest batteries in Africa, planned for commencement late/early next year.
That Redt Eon contract you constantly refer to as being substantial, is also for a demonstration project and nothing else, but it is for a 40KWh battery not a multiple MWh like BMN. However, this still prevents you from recognising any worth in BMN's project, why?
E.ON clearly state in the RNS that :
"as we develop our experience from this project with JB Wheaton we are interested in speaking with commercial and industrial customers in the UK who would be interested in investing in a battery storage solution"
So the contract is exactly the same as BMN's with the IDC in that it will act as an example to drive further work but that customers need to be convinced to buy it at the current market rate, not that E.ON will be buying anything.
I therefore ask once more how can you write off BMN's much larger offering and at the same time make so much noise about Redt's contract with E.ON.
And please to be clear I have no axe to grind with Redt, where my grievance lies is with those that would try to cloud the reality with no care for what the facts really are.
And that really is my final word.|
|@Divmad I take your point and yes $300 per KWh is certainly a challenge. I do not advocate that it will be something that happens over night. No VRFB manufacturer is waiting on the sidelines to build a Tesla type Gigafactory tomorrow. But if VRFBs are to compete somebody has to build one someday.
However, the model for success is my view has to be a VRFB manufacturer with a partner in vanadium mining and electrolyte manaufacturing. VRFB manufacturers cannot raise sufficient capital to expand to Gigawatt levels without proof they can either win the contracts or deliver on cost.
Any VRFB manufacturer operating without that back up is buying on an open market that has even in just the last 10 years shown extreme volatility.
That is why so many junior miners are teaming up with VRFB manaufacturers, Gildemeister in Australia with Australian Vanadium, UET with Balong New Materials in China, and BMN in S.A, VanadiumCorp with En Sci Tech in America, etc etc. VRFB manufacturers are seeking that guaranteed supply and cost effective electrolyte.
I doubt they will all make it, but thats not the point, its about the consensus that that is the model that will help drive down the cost per KWh to the $300-$350 range and open up the vast majority of the projected revenues available.
BMN with Vametco have one of the cheapest costs to mine in the world, they have one of the best technological partners in the world, they have a very favourable exchange rate in S.A. to boost their electrolyte production competitiveness, and they will have a head start of minimum 2 years on the opposition.
That's not a bad start.|
|@The Stigologist I will try to answer you as best I can with as few words as I can for want of being accused of further verbosity.
The idea that the vanadium market can react quickly to any shortage experienced somewhere else in the suply chain is I am sorry to say absurd.
The best way to demonstrate this is in visual form.
Let’s employ Largo Resources who whilst being a listed company that has had to survive the worst years of vanadium prices, is a producer now in profit as the market recovers.
If you refer to slides 14 and 15 they give a good view of the historical supply and prices of FeV.
As an example, when one reviews the period between 2003 and 2006 one can see that FeV prices experienced a major surge from around $10 per Kg to over $70 in 2005. By 2006 they were back in the range of around $40 per Kg, but they never again saw $10. The closest they have ever come is around $13 in 2015 as the world reacted to China’s downturn both mentally in terms of fear and physically in the form of the oversupply of steel in China.
Then in 2007 prices surged once more from around $28 to $47 per Kg.
Now if you review the reaction of the supply chain to these movements in price, on slide 14 we can see that China began increasing production in 2004 (1 year later) once prices hit $30 per Kg but even by the time that prices had returned to $40 they had only been able to double supply, over what was a 3 year period.
Then in 2007 when prices increased 70% or so, they could only add 10-15%.
If you refer to slide 15 which covers non Chinese supply you will see that despite the price increasing by some 600%, the supply from the rest of the world increased no more than around 10% between 2003 and 2006.
Then between 2007 and 2008 the supply plateaued despite that 70% increase in prices.
Whether the world has 1000 years of supply or not does not matter, it is its ability to mine and process it at a level that is commercially viable plus its ability to react to market changes is key here. Yes vanadium is everywhere, it is even in the sea but that doesn’t mean you simply turn on a tap and out comes 20,000 more tons of the stuff.
If you refer to slide 23 you will see that 74% of the world’s supply of vanadium is as a by-product to iron ore that contains vanadium.
That is what China and Russia do and that is all they do. There is only one pure play vanadium miner in the world today and that is Largo, BMN will be the second.
If by-product were to have any chance of filling the supply deficit it would require expansion of the steel plants in China as they are the only supplier that has answered previous surges in prices and they only produce by-product vanadium.
China at 1.1 billion tons of production is already producing 400 tons more than it needs, hence the very publicised pressure being brought to bear by world leaders to redcue output.
Right now Chinese steel manufacturers are either under pressure to shut down (China has a reduction target of 150m over the next 3 years) or they are substituting low grade local iron ore, high in vanadium content, with high grade sea borne iron ore with lower vanadium content (See slide 25).
So the idea that there are steel manufacturers in Russia or China, the suppliers of 74% of the world’s vanadium, that can expand supply and thus vanadium by-product production, just doesn’t add up. What the world needs is an urgent reduction in steel production capacity, and market dynamics will win through in the end and make it happen in some shape or form.
Therefore, one way or the other over the next few years China the producer of 57% of the world’s vanadium is going to be under pressure to maintain that level of supply. In market where there is already a supply deficit any further losses of supply, however small, will add to the pressure on prices.
Furthermore, in 2003 China was still in the middle of a huge expansion and thus had more and more steel manufacturing coming on line. It could therefore expand and fill any shortages in the supply deficit for FeV and help pull those prices back from $70 to $40. Now they are operating at almost full capacity and pulling any trick they can to stay in business and maintain what they already produce. Therefore, a shortage of vanadium supply does not have a fix without those new pure play mines coming on line. So that means a medium term supply issue which will pressure prices and place VRFB manufacturers under pressure as their electrolyte prices rise.
Finally, the point about there being no allowance for an uplift in VRFB demand.
A 1MWh battery requires approximately 4 tons of pure vanadium. A 1MW battery holds roughly 4MWh of storage so 16 tons of pure vanadium.
If the current world supply of electrolyte(approximately) 200MW (800MWh) is taken up by the numerous VRFB manufacturers, that equates to approximately 3,200 tons of vanadium or 3-3.5% of the current world supply.
91% of the world’s vanadium is used in its main market of steel strengthening and 44% is retained by China for use in China. That doesn’t leave a great deal for VRFBs to fight for.
If the likes of UET, Redt, Rongke Power etc are to realise their ambitions of multiple utility grade MW installations, then we are talking about an industry that would as a minimum want to be delivering what 1GW of storage per annum? That would amount to over 16,000 new tons of material.
Where on earth do you think that is going to come from and in the current market at what price. . .|
|OK ill chip in on the argument.
It is the mining company's that hold prices to a level at which a profit is received.
All a cartel.
Take frocking in US, the Arab states tried to flood the market with excess oil and the effect was big drop in oil prices now they see it was hurting them most and have now shut back.
Mining is the same turkey don't flood ya market and all will do well.|
You make a strong argument for a persistently upward V2O5 spot price amidst chronic supply deficits, which is bullish for current producers not tied to fixed priced contracts. I include BMN in that category even though there is still some degree of uncertainty how they will fund the much larger entry into the business via Mokopane deposit.
But frankly, with the sort of supply deficit background you are arguing will happen, I find it next to impossible to believe that ANYONE can drive down the price per KwH to the circa $300 level without some new technological breakthrough in VRFBs, given the input make up so dependent on Vanadium.|
|We have a 1000 yearts supply of oil in the ground, globally, but that doesn't prevent periodic spikes in its market price, or the expenditure of $billions to extract new supplies at economic prices.
McGregor's statement is useless self-serving mantra.|
|Here's from redT's CEO, i'll highlight the important sentence.... "Vanadium, the most commonly used metal in flow battery technology, is a significantly more plentiful element, and therefore does not suffer from the supply restrictions which you rightly noted are driving up prices. Based upon US Geological Survey resource data and current usage, we have 1000 years supply of vanadium."
Batteries not included
* I was surprised that you cited lithium-ion batteries as the â€œtechnology of our timeâ€5533; (â€œA plug for the batteryâ€�, January 16th). A consensus is emerging within the industry that electricity storage will require a number of complementary technologies. Where there is no one dominant technology, the suitability of a storage system depends on how and where it is going to be used. You highlighted the limitations of lithium in storing grid-scale power which alternatives can address. Flow batteries, for example, store energy in tanks of liquid electrolyte and so neatly sidestep this problem, since more energy can be stored through a simple increase in tank size. Vanadium, the most commonly used metal in flow battery technology, is a significantly more plentiful element, and therefore does not suffer from the supply restrictions which you rightly noted are driving up prices. Based upon US Geological Survey resource data and current usage, we have 1000 years supply of vanadium. Whilst lithium has enjoyed success in short duration applications, it is longer duration services that will drive the de-carbonisation agenda and smooth imbalances between generation and consumption. I would suggest that the flow battery is the real â€œtechnology of our timeâ€5533; and that it should not be eclipsed by its younger, and often noisier, cousin.
CEO, redT Energy
|There is a fundamental problem with much of alaskin's 'analysis' in that he/she seems to think the Vanadium market is a simple 'closed' market only affected by supply-demand for Vanadium. The majority of vanadium mined is actually simply a by-product of other materials/processes so many of his/her arguments fall down as they are all seemingly based on this simplistic and wrong-headed basis.
Vanadium Production & Uses
Vanadium is produced as a by-product of steel smelter slag, and is also mined in two different types of mineral deposits: disseminated in carbon rich deposits and shales (as with American Vanadium's Gibellini Project), and in magnetite (iron oxide) deposits alongside titanium.
The three largest vanadium producers are China, South Africa and Russia. In North America, vanadium production comes from spent catalyst, residues from burning coal and heavy oil, byproduct of uranium mining, and imported pig iron slag.
So when he/she comes out with statements like this it is rather disingenuous because he/she wants the casual observer to assume that higher demand = higher prices = demand for primary production from BMN. When the demand could actually be met by other miners who have excess supply of it due to them producing more iron/steel etc. So you could very well see higher demand for Vanadium but lower prices obviating the need for new mines such as BMN's
12. There is no allowance for any uplift in vanadium demand through increased VRFB take up. Any demand that is stimulated will only place more pressure on the V205 price.|
|$300's is a revolution, just I doubt BMN will be the one to succeed in doing so, the main cost in a VRB is not the electrolyte as you keep implying, if it were then it would account for more than 50% of cost.
You of course steering clear of the facts surrounding this company whilst often referring to redT as if it's inferior, clearly by contracts won with likes of E.on, working with SSE and manufacturing with the U.S.A's largest contract manufacturer in Jabil who approached redT to manufacture their product and not the other way around would suggest otherwise. You have nothing today, no production, no VRB of your own and no clear idea if you secure deals whether your manufacturer can produce them in the purported quantity you are suggesting.
Today you have a lot of talk that clearly those who are researched have decided it is more wind than fact, it has a wiff of AFPO in my opinion but then I leave that to those invested to make their own decisions. If they had a clear business path then I would suspect they'd of raised enough cash to last for a longer period of time, moreso to actually fund a project or two/three/four, there's enough being talked about, seems they can't for whatever reason get the support.... I'm yet to read an over subscribed fund raiser.
I'll take my chances with redT, likewise I'm sure you'll stay with BMN. Good luck to all we are all here to make money after all is said and done.|
|@The Stigologist Like I have already explained, yes in great length, to Dogrunner11, this is investing, its hard, its complicated and it can cost all of us a lot of money if we get our decisions wrong. Therefore, I choose to present detail such that anyone reading it can appreciate its content.
I do not spend many hours putting together these posts simply because I wish to somehow believe I can confuse somebody in to believing what I have to say because it wouldn't be a very clever or profitbale tactic would it.
But if it is a tangible argument you would like then no problem.
1. It is a fact that the world vanadium market is as I write in a supply deficit of between 5% to 11%.
3. China is home to 58% of the world's vanadium supply and the majority is as a by-product to steel. That steel manufacturing is under pressure to curtail its production and, to maintain profitability. This is being done through substitution of material with vanadium in it to material from abroad without it. So the vanadium supply is under added pressure on two more fronts.
4. Chinese 98% pure vanadium pentoxide prices are 20% higher in the just the last 30 days trading. They are 55% higher in the last 360 days but that will most likely jump as Nov/Dec 2015 were the lowest prices recorded in last V205 price slump. (Source Asian Metal)
5. There is no known shut in supply waiting to come on line when prices rise unlike iron ore.
6. It takes approximately 5 years from discovery of a resource to actual mining.
7. The nearest rival junior vanadium miner to BMN is at the very least 2-3 years from production and requires prices in the region of $7 per lb to stimulate investment to construct their mines.
8. BMN whilst not having declared the Vametco transaction as complete, have reported that it is a ‘done deal’. Therefore, whilst there are always things that can go wrong in business, it is more likely than not going to be closed out in BMN’s favour.
9. The 2,400 ton capacity at Vametco is not new supply, it is included in the current market shortage as it was being sold as a premium FeV product called Nitrovan.
10. The cost for Vametco to produce their product including all royalties is $17.33 per Kg. Current FeV prices stand at $23 per Kg and Nitrovan is a premium product. But BMN through their Brits Vanadium Project, which sits 800m from Vametco and is a direct extension of the strike extension of the Vametco mine, holds near surface high grade ore that BMN have announced will be employed to lower the cost of production at Vametco.
11. BMN intend adding a further 3,000 tons of production over the next 24 months. That will be additional supply but it won’t balance the market and thus suppress the price increases being witnessed this year.
12. There is no allowance for any uplift in vanadium demand through increased VRFB take up. Any demand that is stimulated will only place more pressure on the V205 price.
13. BMN own one of if not the largest known vanadium resource in the world and, they possess the highest insitu grade V205 in the world by some 1% in content.
14. BMN do not need VRFBs to be a successful miner. The current recovery in V205 prices is sufficient to drive greater profits at Vametco and investment in their other project at Mokopone. VRFB demand will only improve their profits be it through more ore mined or stronger V205 prices and the scramble for what will be a shortage of material.
14. If VRFBs fail BMN build a mining business off the back of the supply deficit in the industry. If VRFBs are successful, BMN feed off even stronger V205 prices due to the huge increase in demand for V205 and, they get to mine even more of their vast resource because in the medium term nobody else has any to offer.
15. If VRFBs succeed then low V205 prices will never again have an effect on the BMN business model. Lower prices stimulate more VRFB installations. Higher prices enable BMN to determine the correct price depending on how much mined resource they have available at the time.
That is about as concise as this complicated investment can be, I trust you understand just how tangible the argument is now.|
|Oh I nearly forgot, you asked what do BMN intend on the cost per KWh front. Well to be clear BMN do not intend being a battery manufacturer per say, but they do intend stimulating the market through cost effective electrolyte supply, to deliver at a cost between $300-350 per KWh. It is this level that it is currently believed will be needed to access the mass market.
Anyone operating too far above that level will unfortunately, in time, fall by the wayside, because that's where Lithium-ion will be at the very least.|
|@Dogrunner11 Unfortunately I don’t get the time to post on these BBs as some do, so when I do I present detailed analysis, which yes at times can be rather long. However, given that we are supposed to be professionals and investors, and are thus willing to commit our hard earned money to the stocks we choose, I believe it is worth the detail, the time and the effort.
As someone who has stated that they have committed 18 months at 8 hours per day to their research, I would have thought that I would have received a more courteous response and respect, even if you don’t agree with my conclusions.
Nor do I believe have I been discourteous to you, despite witnessing your rather distasteful entrapment tactic with another poster here, Nick Derby. I have seen your ‘ramping waffle’ type of response before and for me it is if anything a lazy way of discounting facts or opinion, which the respondent doesn’t wish to hear. That’s a shame because I actually welcomed the opportunity to debate with a shareholder in a VRFB manufacturer, which I am not.
To your response.
Firstly I don’t really understand how you have concluded that Redt are half the cost of their nearest competitor, nor do I see where it is relevant. Each VRFB manufacturer is on their own and they are all up against it cost wise. Why on earth do you think there are so few completed VRFB projects in the world today? Why does Lithium-ion make up the vast majority of the market? There is no doubting the technological advantage VRFBs have but they are too damn expensive by far and the whole industry knows it.
Yes contracts are being won at $700 per KWh but it will never be enough to make Redt or any other VRFB manufacturer very profitable.
As for your attempt to undermine the quality of my research by insinuating that I simply checked the VanadiumCorp website for the world electrolyte capacity, well I am afraid you underestimate me.
I do not ever accept anything that is presented in this industry as fact because one source says it is so, that would be foolish and I would simply be playing along to the propaganda these firms deliver in order to raise their profile and their share price.
I have seen the VanadiumCorp page you refer to, but I prefer the following articles as evidence ;
The first article is written by Andreas Luczak MD of Vanadis Power GmbH. The reason I trust its authenticity is because Vanadis has strategic partnerships with Rongke Power, UET and more importantly Balong New Materials, who in 2015 held control of what was then 70% of the world’s electrolyte manufacturing capacity at 300MWh
The second article is by The Vanadium Electrolyte Processing Partnership, an independent alliance of vanadium developers, whose committee includes Dr Maria Skyllas Kazacos the inventor and pioneer of the VRFB. I take it as an investor who has committed so much time to the VRFB industry, you have heard of both her and the Partnership she is a part of.
If you look closely at their page you will note that the key green highlighted sections on the VanadiumCorp page you provided, are lifted straight from it. So VCs facts aren’t such propaganda after all.
Again I would have thought someone so well researched would know all this so would not waste my time regurgitating a website page with a view to misleading people to think the facts are any different and I am some two bit BB poster.
Finally, because I sincerely do not wish to waffle any longer than needs be, if you refer to the home page of The VEPP website (see below), you will see that under ‘VE Solutions for New Supply’ it states “High purity vanadium supply is described as the missing link for the VRB. Lithium batteries have primary supply sources while VRBs do not.”
As I have made abundant clear, you can have all the patents you want but if you cannot access sufficient quantities of raw material at a price that effects mass take up, then you are doomed to be an all so ran, be it as a technology or as an individual company that made the wrong corporate decision.
And there ends our debate. I will go back to my jack of all trades vanadium miner, you I suggest to your books because with all due respect 8 hours doesn’t seem to be enough.
|> What I will say if I may though is that at $700 per KWh you must have cause for concern for their long term profitability.
Below $700 which is commercial entry price, however it is reassuring to know we are around half the cost of our nearest competitor.
> To be competitive and to ensure a larger market for their VRFBs they need to be at the very least under $500 per KWh
I hope you are doing so, be interested to know the answers.
Alaskin, sounds ramping waffle IMO, as you pointed out yesterday all good and well your company is about or wants to achieve but as of today you have nothing apart from a company that wants to jack of all trades master of none. Today it still has nothing, apart from a lot of good talking, actions rather than fund raising once every couple of months would be something I'd be concentrating on.
Thought it was interesting your quote yesterday I ignored it as I really do not want to get involved with mining discussions, but I do find it funny your sources, here i'll link the website, remember DYOR....
"Current global market size is approximately 400 MWh of annual electrolyte production capacity
Conventional production of a primary vanadium producer would equate to ~1,600 MWh/annum based on 8000 tonnes V2O5 /annum"
|I think someone is making up for lack of tangible arguments with verbosity.|
|@Dogrunner11 Firstly thank you for your reply. I welcome the debate and believe that we can all benefit by sharing our opinions on this market. Perhaps posting on other share boards does not encourage the correct level of openness but make no mistake, VRFB manufacturers and miners of vanadium are intrinsically linked, whether they like it or not.
I will try not to dwell on Redt too much because this is a BMN BB after all. What I will say if I may though is that at $700 per KWh you must have cause for concern for their long term profitability.
As an investor I would be asking pertinent questions of the BOD regarding how they intend tackling this issue in the coming years. To be competitive and to ensure a larger market for their VRFBs they need to be at the very least under $500 per KWh, but even then they will be playing catch up. They may well be taking steps to ensure this but they are effectively in the hands of Jabil. Furthermore, they cannot possibly make any serious headway without a secure supply of cost effective electrolyte and that is not easy to come by.
They have now just enjoyed the best year they will likely ever have in V205 pricing and with those prices now reacting very strongly to the supply deficit in the market, the price of the electrolyte is going to be driven higher. If we add in the expansion of their competitors then that is only going to further pressure those electrolyte prices.
Redt can no doubt win some contracts in the market place at that price range but they will be off the back of customers understanding and appreciating the technological advantages of VRFBs over Lithium ion and not price, so their success will be limited. The vast majority of customers will only care about their front end costs, which at $700 per KWh are already some $200 per KWh higher even than the likes of UET. Yes UET have had a head start and Redt may need time to fine tune their product in the coming years, but what they must be careful of though is that they don’t take too long to achieve it.
The majority of other VRFB manufacturers are teaming up with budding young junior miners in order to guarantee their future V205 supply and more importantly their pricing structure. If the energy storage market takes off in the sort of numbers that are being quoted, and VRFBs are able to take what is often regards as being some 20% of that growth, then the world, as a minimum, is going to need 10s of thousands of new tons of vanadium. So I would again be asking what is Jabil doing to secure that pipeline. They certainly have the resources to buy into it but do they have the will also.
I wish you luck with your investment and sincerely hope that Redt are a success, if for no other reason other than the more VRFBs that get built the greater the pressure on V205 supplies and their prices, which can only ever be good for BMN.|