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| Share Name | Share Symbol | Market | Stock Type |
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| Redt Energy Plc | RED | London | Ordinary Share |
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| 0.00 | 0.00% | 52.50 | 01:00:00 |
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Posted at 16/6/2022 09:41 by owenski Thanks GreenI keep an eye on this as I think it has potential, but the deal signing has proven to be too slow and could push the desired cash flow positive, that investors want to see, out by a factor of years. I think it's a realistic financial assessment to estimate 80m revenue to achieve profitablity, but this is nowhere near that and upcoming results likely to look dire. It's a shame really and I don't know what's going on here, we're supposed to be in an energy transition phase, lithium has risks and is price trending up, VRB's are cost effective on the project life cycles they're designed for, so where's the uptake?? Management could do with updating shareholders more regularly. The SG deal could be the game changer required and accelerate deals, also, the SG partnership will be for large scale projects, even so that could also take time to materialise. I suspect good old RED/IES will be true to past form and raise funds again in about a years time. |
Posted at 23/2/2022 11:01 by owenski Exert from todays news -"Invinity is leading the project consortium, which includes Pivot Power, part of EDF Renewables, and EDF R&D UK, with the objective of progressing this first-of-a-kind project towards financial close and ultimately delivery. With the aim of generating low-cost, low-carbon, dispatchable energy as part of the UK's journey to Net Zero, the project will serve as a template for other grid-constrained solar generation sites globally." I can see this working well and being a statement of intent for the wider storage market. Bit like watching paint dry with Invinity, but the signs are there for a growth company, should also be some news flow from GS venture this year, which is a project tilted towards very large scale utility grade storage. The odds are favourable for Invinity to be in a sweet spot at some point - as a guess, I'd have thought well within a two year time span tangible operational and positive financial clarity should be evident to all and sundry. Meanwhile, Invinity has already raised funds that should pay the wage bill and more for at least two years thus de-risking investors from dilution. Funds were raised at 100p, one can buy in today @ 77p, gotta be a very reasonable lower risk higher reward entry point if one can exercise a bit of patience - forward expected news flow only lessens that risk. One other thing, Russia is providing a fillip to weaning off imported fossil fuels and not just to the UK. The chart shows - down, the business shows - up. Maybe time to follow the business. |
Posted at 01/10/2021 11:37 by owenski Excellent presentation on IES interims -A very credible focused team and great overview of financials from the CFO IES are going places, however, short term they are still showcasing the systems with ESO being critical as a shop window to potentially accelerate other projects. They will, as said, require funding for probably another year possibly two. At year 2, I'd expect them to be profitable. My calculations - taking into account that they have pricing pressures from shipping and raw material input costs - which have knocked back their projected GM from the 20's into the teens, price in a required estimate that they turnover c £75m to £80m in order to achieve profitability. They are not there yet, but will be worth taking a position here at some point. |
Posted at 30/9/2021 12:19 by owenski Cheers GreenTwo words investors don't want to hear - DELAYS FUNDING |
Posted at 03/4/2020 13:36 by gerd212 In the absence of working newsfeed - todays RNSRNS Number : 6584I Invinity Energy Systems PLC 03 April 2020 THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS RESTRICTED AND IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR AUSTRALIA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL 03 APRIL 2020 Invinity Energy Systems plc ("Invinity" or the "Company") New Website Launch and Management Presentation Invinity Energy Systems plc (AIM:IES), manufacturer of vanadium flow batteries for the large-scale energy storage requirements of businesses, industry and electricity networks, is pleased to announce the launch of the Company's new website, invinity.com, following the merger between redT energy plc and Avalon Battery Corporation approved by redT shareholders at an Extraordinary General Meeting held on 1 April 2020. This is the new website address at which the information required by AIM Rule 26 is available Invinity will host a presentation for shareholders on Thursday 9th April at 4pm UK time. Neil O'Brien, Chairman of Invinity, will chair the presentation, which will feature members of the Company's senior management and cover a number of areas including: · An introduction to Invinity's new Executive team · The market for energy storage and the macro themes that are driving its growth · The role of vanadium flow batteries in global energy storage and how they compare to other battery technologies · The strategic rationale for the merger and subsequent creation of Invinity Energy Systems · Invinity's near-term strategic priorities and commercial targets This will be followed by an interactive Q&A session with management. The event is expected to run for approximately 60 minutes in total and will be held via an online platform. If you are interested in attending the presentation please RSVP before 4 pm on Tuesday 7th April via email to Invinity@hudsonsandl Enquiries: Invinity Energy Systems plc +44 (0)20 7121 6111 Neil O'Brien, Chairman Larry Zulch, Chief Executive Officer Fraser Welham, Chief Financial Officer Joe Worthington, Head of External Communications Investec Bank plc (Nominated Adviser and Broker) +44 (0)20 7597 5970 Jeremy Ellis / Chris Sim / Cassie Herlihy VSA Capital (Financial Adviser and Joint Broker) Andrew Monk / Andrew Raca +44 (0)20 3005 5000 Hudson Sandler (Financial PR) Nick Lyon / Toby Andrews +44(0) 207 796 4133 Notes to Editors About Invinity Energy Systems Invinity Energy Systems plc (AIM:IES) manufactures vanadium flow batteries for the large-scale energy storage requirements of businesses, industry and electricity networks. Developed specifically for high-utilisation applications that make low-carbon renewable generation reliable, Invinity's highly scalable, factory-built flow battery products can run continually with no degradation, charging and discharging for over 25 years. Energy storage systems based on Invinity's batteries are safe, reliable, and economical, and range in size from less than 250 kilowatt-hours to tens of megawatt-hours. Invinity was created in April 2020 through the merger of two flow battery industry leaders: redT energy plc and Avalon Battery Corporation. With over 10MWh of systems deployed to date across 40 sites in 14 countries, Invinity is active in all major global energy storage markets and has operations in the UK, Canada, USA, China and South Africa. Invinity Energy Systems plc is listed on the London Stock Exchange. To find out more, visit invinity.com or call Investor Relations on +44 (0) 207 121 6111. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com. END |
Posted at 31/3/2020 14:22 by owenski Looks like retail investors punting this based on the total value of trades.I'd imagine under current global COVID restrictions this'll need bailing out again at some point. |
Posted at 20/3/2020 10:20 by sparki2 When shares are being bought by "institutional investors" at 1.65p in the Placing it is not often, in my experience, that retail investors are then given the chance to buy in the market at a substantial discount to that price. An opportunity not to be missed? FWIW one that I have taken advantage of! |
Posted at 18/11/2019 14:00 by dontay You asked for it, don't blame me!Good afternoon FM and MN" "Very good thank you""Good to talk to you again, we met Fortune in London a few months ago he kind of gave us an introduction to the story. MN, this is the first time we've met, so lovely to have you on board, hello.""Why don't we start Fortune, can you give me the usual one minute summary for people new to the story so that we know what we are going to be talking about."FM: "For those that are a bit new to this Bushveld Minerals AIM listed integrated primary vanadium company with a fairly clear strategy that we want to be leading a significant low cost primary vanadium platform that's integrated downstream into a very exciting energy storage market. Two parts to our story, on the one hand is our primary vanadium production which combines a collection of primary vanadium deposits which combined present 500 and 50 million tonne resource of high grade vanadium deposits which is the largest high grade vanadium resource base of anybody in the world which is complimented with two processing facilities, Vametco which is in Brits, which is currently being the sole source of our revenues for supplying 2560 mtV which is just under 3% of the global market last year. And today we actually completed the acquisition of a second plant which is Vanchem which is based in Mpumalanga province. Between the two plants we now have a very good platform to scale up our production following a refurbishment programme at Vanchem and an expansion programme we are undertaking at Vametco to more than treble our production base to 8400 mtV for the next 3-5 years. So that is one part of our business. We like the fact that we have two processing plants and we have a fairly good product mix which is broad which comprises Nitrovan and Ferrovanadium which is used in steel making, vanadium pentoxide and trioxide as well as vanadium chemicals and following the completion of our electrolyte manufacturing plant in East London will also include the vanadium electrolyte. So that platform then positions us very well, in our view to respond to what is the really exciting and growing multi-billion dollar energy storage market. Which will be dominated by long duration type energy storage in which we will see vanadium flow batteries really shining. We think it's quite import that we position the company for that sector and we do that through Bushveld Energy which is really well positioned to drive the adoption of VRFBs in that sector.""Ok, great for the summary, you've got a couple of press releases out today which I guess you want to talk about, I'd like to talk about it too, but can we talk about in the context of what you are trying to build. When we last spoke, you talked about building an integrated business, a lot of people do, but they don't necessarily have the wherewithal or knowledge of how to do that, so Vanchem acquisition is for you quite important, do you want to tell us a little bit about that?"FM: "What we announced today was the completion of the transaction which has obviously long been in the works and we've announced it in the markets 1st May this year and we are delighted that, One, we have been able to complete this transaction and take over Vanchem, but secondly, also that we've been able to do it on transaction terms and a structure which we think is very good and very positive for the groups financial position.""Can you talk about that, so $53.5 million how does that break down, and why did you do it like that?"FM "Well you will recall that initially the transaction was announced as a $68 million transaction and in the short term, I think we all know that there has been a downturn in the movement of Vanadium prices, we saw in that an opportunity, in our view, to have a conversation with the sellers around how we possibly restructure that transaction, and we are grateful that they were pragmatic and realistic in agreeing to that so (inaudible)$53.5 million revised transaction consideration which is payable with $30 million which we've payed now, and $23.5 million is effect a deferred consideration in the form of a convertible bond which has got a two year term. If you take a very short term view, what has happened in the market is a good justification for the kind of structure that we have. Our view, however, you don't buy a plant on the basis of a twelve month outlook in Vanadium price. Our's is a medium to longer term outlook in the commodity and we think that the transaction structure that we've got is really good and we remain very bullish about the outlook for the Vanadium market.""Fantastic, what are the terms of the convert that you did?"FM "It's a two year convertible and it earns an interest of 5% and the holders of the convertible have the right (it's 5% per annum), to convert 50% of it into Bushveld shares after twelve months and another 50% after twelve months if they don't want to convert, then after two years we either redeem that bond or possibly convert that $23.5m into Bushveld Shares. The convert is based on a VWAP basis with a small discount applied to it at the time that the election is exercised.""So that's not going to come back and hurt anyone further down the line?"FM "Well, we think that story of Bushveld and even before we talked to BE has got a lot of headroom for growth. I personally do believe that the sellers of Vanchem would be very well served to convert into Bushveld shares then hold and participate in the growth of the company, and I do believe that as we execute our strategy that proposition will only become that much more attractive and I think there is a fairly good chance that they may well consider to take it up and if they do lets keep it in mind that it is Duferco that we are talking about, they are a very credible party that has been very active in the Vanadium market and I wouldn't have a problem at all having them on the register of BM, and that's a positive thing.""Remind people what you get within that deal, the plant obviously, but there's a bunch of other things too. And what value do you attribute to those?"FM "So Vanchem has three kilns and it has a chemical plant, it has also got a facility that produces Vanadium Pentoxide, it also produced Vanadium Trioxide. It's actually quite attractive that you can produce those two distinct oxides, to put it in context, at Vametco we've produced what we call NVO before we convert it into Nitrovan. And NVO is a bit of a mix of Vanadium Pentoxide, some Trioxide, and even some different oxides, it's a bit of a mix, and the ability to produce a pentoxide product and a trioxide product is actually quite valuable and then it's got two conversion facilities for Ferrovanadium which allows us to either convert pentoxide or trioxide into Ferrovanadium and the fact that it's got three kilns means also that you've got a lot of flexibility in the way you run the plant. At Vametco if we shut down the kiln and that means that we stopped roasting while we are doing that."Stop revenue?"FM "Well not entirely, because you still have some product past the kiln that is already in the leaching facilities, etc. The good news here with Vanchem is that I can stop one kiln for maintenance and I can have two kilns still running at full throttle. And the ability to scale up and down your production in response to where exactly the market is at any one time quite positive.""Tell us a little about the South African Japan vanadium property and also requiring the 100% shares of Ivanti. Do they hold real value today to you or they for something further down the line?"FM "The SAJV speaks to one of the Ferrovanadium conversion facilities and I mentioned that there are two of them. One of them essentially operates as a (inaudible)a conversion facility, the other is a (inaudible) furnace, both of them produce Ferrovanadium, but one of them converts Vanadium pentoxide and the other Vanadium trioxide. They do have proper value as I indicated that the ability to produce different grades of Ferrovanadium is quite attractive. Ivanti is a slightly different thing. Ivanti holds the rights to the residual vanadium that gets recovered from what is called the todem (?) which is part of vanadium processing flow sheet at Vanchem. There is a commercial contract in place with another company that extracts whatever residual vanadium is there and through the acquisition of shares of Ivanti we acquired the rights associated with that process.""What's on the horizon, what else on your mind do you need to put into place? I guess Mikal you are going to talk about the energy component in a second, on the vanadium side, what's on your mind?"FM "Well Vanchem was the only other primary vanadium plant that existed in South Africa, so between that plant and Vametco we have two of the three primary vanadium plants in South African, or two of the four primary vanadium plants in the world. Between the two on the back of a refurbishment programme and the expansion of Capex at Vametco we have been in the position to produce 8400mtV as I indicated earlier on that is more than treble of what we produced last year. So between the resource base we have, and by the way even producing 8400mtV we still are not consuming over the life of mine even a quarter of the resource base we have.""With the large resource base, with the processing capacity that we have, we think that we are in a very strong position to, one, supply on a low cost basis to the steel industry with a broad range of products and produce vanadium chemicals as well. But we are also in a very good position to respond to, as we indicated earlier, what we see as a growth energy storage market, we also want to be very proactive as a company to unlock that market opportunity. When we are successful to do that, we want to make sure that the security of the supply of vanadium onto that space is not in question, so to answer your question around our strategy, we think that with Vanchem and Vametco, and our resource base, we now are well positioned to really drive up our production, low cost production base, then we really have a solid platform to then do the kind of work that we are looking at in the energy storage market of which MN will tell you about.""In terms of the pipeline you are done now, is that what you are saying on this side of the business?"FM "Let me put it this way, if the energy storage market forecasts something like a 100,000 MWh of energy storage deployments per annum by 2027 come to pass, and if you assume that only 10% of that and bearing in mind that 90% of that is going to be long duration energy storage, which is kind of the sweet spot for VFRB's. If the area of base could capture only 10% of that we will need something like 50 000 tonnes of new vanadium supply PA going forward and that is more than 50% of 2018's global vanadium production, so yes I think we would do well to focus over the next few years in unlocking the processing capacity and the growth within the assets we already have now, but make no mistake, the world will need much, much more vanadium than that, and we've made the point before that we think the Bushveld complex is the pure .... ? of vanadium and the largest resource base beyond what we have. And I do believe that the eyes of the world will be turning to the Bushveld complex for Vanadium. So you can never say that we are done."MN "Plus we still retain a lot of optionality to improve the processing capacity that we have, we've still got the resource at Mokopane which will be one of the ways that we feed feedstock into Vanchem, but that was our first project, we can still build a whole new mine and processing facility there, we can put another kiln at Vametco, we've mentioned that Vanchem has three, Vametco has one. We have more than enough resource to do that, the question is, do we need to put that much more volumes, and if the demand says yes, we can do that a lot faster than someone who doesn't have the resource, or doesn't have the grade, or actually doesn't even have the mining rights. We have the rights to increase the capacity at all those sites.""Fair point, the reason I'm asking is that I'm trying to get an understanding of what the cash grants are of the business going forward. You've just completed this acquisition, which is great, and you've structured it in a very interesting way to kind of defer payment for 40% of the payment. If there is nothing else in the pipeline, there is no big capital fundraising required for that, there is no capital outlay required going forward, I just think this is obviously good news, you can focus on generating cash, is that the plan?"FM "We are focusing on generating cash, we are focusing on growth - Both. Our story, our proposition still remains. We want to be producing at a rate of more than three times we did last year. That's a capital growth story. We want to secure a significant position in the energy storage market with an (admirable) proposition. But we want to do that leveraging a very solid cash generation platform which obviously we will be able to do with the resources and processing platform that we've got today.""Bushveld Energy, you get a lot of coverage online for your expertise, so I hope that you can share some of that with us today. Can you tell us again, just a little summary of what BE is and what you think it can become in the context of BMN?"MN "Sure, I think what it can become is something even larger than what we are doing on the mining side, I'm not going to put a timeline on that, but in terms of upside that is possible. But that is where the market is going. It is just a question of how we get there. In terms of what BE does itself, think of it as three verticals, one is around electrolyte that is a specific type of vanadium chemical, it's the piece that stores energy within the batteries. We are building a facility in East London. We are doing it together with the IDC, we've got our environmental approvals clearance in September, we just went out to tender for the construction of the facility there."The second thing that we are doing in the electrolyte is that we've created a rental product where we've taken advantage of the fact that the (electrolyte) doesn't degrade through use in the battery, it can be fully recovered to be deployed in another battery or converted very cheaply into Ferrovanadium again. So that is the second thing that is going to be more of a financial product. The second part within what BE does is around manufacturing. We envision there being a facility in SA for assembly of VRFB's as the market grows. More recently what we've started doing is work with the vanadium battery original equipment manufacturers. There is a number of ways with which we work with them, one of the things we've announced is investment and I can talk about that further. We definitely feel that these companies there are some good ones out there, and they are going to generate a lot of upside in their value as the stationary storage market grows, and as we see this trend towards longer duration where our technology is a lot more powerful. The last piece is around deployments, so we do project development. We've got a team that looks to deploy energy storage sometimes coupled together with renewable energy, sometimes on it's own. And really, that's quite an exciting opportunity, especially on our continent where the need for energy is very high, but the provision of it is very unreliable.""Can we get into some of this we've spoken to a few vanadium companies, some big, some small, some wannabes. And they do like to include their version of how they are going to get into VRFB's, and it is hard to believe sometimes. You guys are a lot further down the line than most, can you tell us about some of the engagements that you've got with industry players, what you are trying to do with them, what's the timeline, what's it going to take in terms of your commitment and money to be able to get you to a point of where there is some sort of economic benefit to shareholders?"MN "There has been a lot of engagement, I mean, I think in the industry we know all the players, this is partially why we think there is more that we can do both from an investment point of view and also a bit of a standard bearer to say look a lot of these companies, well some of these companies are very good ones, they deserve investment and they can offer very good returns on that investment.""So one of the things that we've done through this VRFB investment platform or VIP to keep it short. It's catchy, but it has a big function behind it, because what we see as besides the supply of vanadium the other obstacle that most of these companies have outside of maybe a Sumitomo which is kind of large enough to support itself is that they need scale and it become the chicken or the egg. To get scale you need to have orders, to have orders you need to get your costs down, you get costs down with economies of scale. One of the things that we liked in this specific transaction of Avalon Battery and RedT is a merger. It's two companies looking at completely different markets having different skillsets, the ability to maybe have some synergies on the cost side on the R&D side, but you combine their pipelines and all of a sudden you've got a lot more scale, you get to that economy faster, and it's not that you have to wait two years, you get there in one year, for example. Or instead of four years, you get there in two years. It means less capital to get there, and it's a less risky investment. We think that is very good for the industry, and that is why we like that transaction.""What are you bringing to the party here? Cash? Knowledge? How are you partnering with these people? Are you retaining the existing senior management there or are you just taking over the assets? What's that look like?"FM "Maybe just before Mikhial speaks specifically about what we bring to the party one point to highlight is that we could have taken a view that says look we do like VRFBs and we hope that VRFBs catch on and become a dominant solution for energy storage and hey we are going to supply electrolyte or vanadium pentoxide into that market and leave it at that. The view we took right from the beginning is that it's going to be quite important that we are very proactive given the opportunity and rather than leave it to VRFB manufacturers to do it we saw specific things we can do as a company to unlock it particularly we recognise that the technology is there. The technology is fine but two critical things you need to address. One is the market and energy markets are very very regulated the world over and they are very structural, and there are levers there that if you get right you unlock the opportunity at a large scale, then it becomes the scale that you need to drive the cost down, and also it's very local knowledge heavy in terms of unlocking these opportunities. So don't leave it just to the VRFB manufacturers to go and do that. We can do that and it is not a capital intensive effort. It is an IP intensive effort. People that understand the sector they operate in, that understand the structure of the energy markets and can (inaudible) thats one point."The second point we recognise we are uniquely placed to do is to address the question of the security of supply of vanadium and to address the question of the cost input of vanadium into these batteries. And as a company with what we have done now we have demonstrated we can answer those questions very decisively. Once you have done that you are now really in a position where you say ok now to a large degree we have derisked our geologic stance, the VRFB (inaudible) We don't need to try and reinvent the technology. What we can do is to work together with them and the VIP is the critical part of how we work with the VRFB manufacturers."MN "In terms of what we can bring capital is one but I think it is not just our capital. It's the ability to bring other investors along with us. Now a lot of times being the first is difficult, second is a lot easier. We don't mind being the first. We understand the risks a lot better than I think other investors, especially around the vanadium supply piece. We are very confident that it can be solved and we are ready to put our money just to prove that. I think that's one is that we can drive capital towards that both from our own kind of capabilities and also from external investors. The second is (inaudible) the supply. You see part of that agreement is we have a right of first refusal on supply of vanadium, of electrolyte and vanadium. Those are things we can help solve for both as a product but we can actually develop things around specific to what the customer needs, because sometimes you need a 10 year solution sometimes a 20 year solution 25. There may be certain requirements that are needed to make a project be bankable rather than someone whose buying the battery and has it entirely on their balance sheet. Those are all different ways that we can be flexible. We're not just you know we've got one product and it's kind of a Ford Model T and the colours black you can have it any way you want it as long as it's that. We're a bit more flexible and a bit more creative because we understand that's what the industry needs right now. I think related to that we understand the industry so we can provide some guidance. What we will not do is get into the operations. If you are investing in a company you want to invest in their management. It's about 50% here it's the IP it's the leadership, and what we like. We had a chance to work with Avalon. We did a rental product with them and we really liked that they are thrifty. They got pretty far on probably the least amount of expenditure of the companies we've seen and we would love to have that mindset being taken forward. As an investor I want to know that they are being really thrifty with my capital."We want to leave the operations to the management teams. I think that will also allow us if there are other good companies that we want to take a stake in knowing that we are not going to be involved in the operations, that the conflict of interests is not going to be there I think is very important to communicate. Strategically yes we can look and see where the market is going, we can offer some advice there because we have seen a lot, but we are definitely not going to get involved in the day to day operations."FM "And by the way we also recognise that each of the different companies bring different things. We talked about Avalon. If you look at RedT they have an interesting approach to project development in the energy storage space which we think is very valuable. That's a perfect case where two complimentary companies can bring their relative expertise together to create what we think is going to be a successful VRFB. Not the only one but one of several certainly, and as we indicated through our investment platform we will continue to look for other VRFB companies that we can partner with support. The more there are that are successful that affects scale, the better for the entire industry.""Fortune favours the brave when it works but when it doesn't work that's when people look back and go that wasn't such a smart move. I think what I can admire here is the fact that you do seem to know as much as anyone else in the market place and you can lead in this space. I'm fascinated to see how that plays out because it's early days. It's a fairly nascent space. I know you did say the technology has been around but it hasn't been around economically."FM "I agree with you and two points I would make to your statement are 'Fortune favours the brave' now here is a very important point I want to highlight and it is this. The capital that we need to deploy to unlock this opportunity relative to what we spend building a mine, building a processing plant, it's small. Our electrolyte plant we cost us $10 million. What will it produce? 200 MWh of electrolyte and if scaled up to 4 x that and if at 200 MWh it is using about 1100 mtV. If you wanted to build a mine and a processing plant that produces that amount of vanadium for the steel sector you are talking about more than 10 times that amount of money. So the capital intensity is low. The big capital is spent in building the mine and building the processing infrastructure, and for us better yet that we've been able to do it on a brown field site again, which means that we've done it much cheaper than it would take on a green field basis."So let's argue that we were to drop and the market didn't take off, notwithstanding all the work that's gone into research into it being a real opportunity. We still have a large resource base, we still have a large processing infrastructure which will only get lower in terms of its cost of production, and therefore competitive supplying vanadium, even if all we ended up doing was supplying that vanadium into the steel sector. So how big is this downside? We think very very limited. Take the upside on the other hand is enormous."MN " the other part of it is it requires a whole lot less capital than what we are doing on the upstream . The other is the ability to source external capital for clean energy projects, for clean energy products, for sustainability and the circular economy. That money is out there. Some of it is actually discretionary financing where it is actually cheaper than what you could ever get were you trying to borrow money to build a mine and on much more favourable terms. So we don't have to rely on our balance sheet as far as we would have to for the mining and processing. Yes there's some de risking that we have to do but again it's early stages . The ability to scale up the capital is there, it's just looking for an investable opportunity, so that's what we are providing."FM "And having said that lets remember we set up BE way back in about 2014 / 2015 so we have been hard at work for a good 4 years and I think yes that is why we can talk with a great deal of conviction about this. It's because when we started talking about it and we started putting some resources towards it, each time you have to face some level of scepticism it's a blessing because it makes you rethink your assumptions, making our own (inaudible)And every time we've done it we've got even more conviction that it's absolutely the right time for this and that the opportunity is that real""I guess in your case MN looking at the BE component you've made a couple of recent acquisitions you're not looking further than that at eye moment because you've got to work out how this business moves forward. It's during an exploratory stage aren't you?"MN "The investment into the merger between RedT and Avalon. We're not involved in day to day management so the execution unlike what happens with a Vanchemor a Vametco does not fall on the team here at headquarters. That is their team. We at most play a kind of advisory role through our BoD participation. So actually it doesn't take a lot of management resources in here for execution. That's done by somebody else. It's already established, so if there's more opportunities like that, we are actually on the look out. If it has vanadium and we can create shareholder value we as Bushveld are always going to look at those options. What we do need to execute on are the things more in SA which is around constructing and commissioning and producing electrolyte, and deploying projects. We've put a system with Eskom, we've announced a minigrid that is solar and storage, that's a commercial minigrid. We need to build that and to commission that project and show the commerciability of solar and long duration storage and we are going to build our pipeline because we see there's a lot of opportunities and we can make them bankable.""But who is driving that car? Are you in the back seat or upfront for working where this things going. I appreciate they are running day to day, it's operations and so forth and they've got a lot of knowledge but you can't be passive can you?"MN "Well again if you are investing you are investing in the management team, and I think day to day we are not going to be involved. It's part of our strategy. It's essential for us to be able to deal with multiple manufacturers to say if you guys are going to bid on the same project Bushveld is not going to be involved in that decision. We are not even going to know about it. The only thing we want do is supply vanadium into that specific project. If it's in Africa yes we have developers there, but we intentionally don't want to get involved because we actually think the market is large enough for a few different companies to be successful and we think there are some that have good management teams. Let them go and execute because they've actually executed pretty well to date. The issue of why they are not larger is they've only been around for a few years and they need capital to grow. The demand is there I think the price that we saw last year hurt some of these companies. They had to push back some of their projects so we haven't seen as many announcements as we would have if prices were more consistent with the historical average. Now it's the reverse so it's actually a great opportunity and we call it a hedge. When vanadium prices are high Bushveld is doing very well because of the mining side. Vanadium prices are lower it makes the energy platform a lot more viable and a lot more valuable."FM "And if vanadium prices stay relatively high, because we have a rental product that is designed to (inaudible) against a high vanadium price environment. So when we talk about the natural hedge that energy storage provides the power of that is not appreciated yet but it is incredible.""I understand the mining component because it is linked directly to the price of vanadium. Talking about the hedging component what does that mean in reality for things like market cap, share price, growth, etc? Are you in control of your destiny I'm terms of what that can attribute to the company or is it more of a passive ride?"MN "In some ways we aren't in direct control. Let's take an example of a project like our minigrid. There we are the developers so we get a development fee when that project (inaudible) close. We are an investor co investors so we get the return in equity or dividends from the power purchase agreement that is signed to pay for the energy that minigrid produces. By the way we are supplying a battery into so if we want to we charge a mark up on somebody else's battery. If we are invested in that company we get an additional benefit because our investment has now appreciated in value because that company has now got more deployments.we are supplying electrolyte so we get a fee for manufacturing the electrolyte into that project. We mined the vanadium so now we've got a sale on the vanadium. This integration allows us really to capture the value sometimes 4 or 6 different activities on just one single project. Now I want to be honest we are not going to develop every single vanadium project every vanadium battery project in the world but if it's in Africa then it's extremely active. If it's somewhere in let's say Australia yes we are probably not involved in the development, but we may be supplying vanadium, electrolyte, possibly having equity stake into the company that invested there. Possibly having a stake into the rental product company that is supplying electrolyte for rental. So there's a lot of different ways and it can be extremely active. I don't know who is getting 6 ways to make money on one project. To some there might be only 2 or 3. But in either case it's more than just vanadium and that's what integration allows us to do.""Right so I'm hearing then integration story loud and clear. It makes sense to me. It's well worked through. I get that. So what is the market not getting, because we are looking at the share price. We'll forget the spike that it went through at the beginning of the year. Do you think you are fairly priced today, given your story?"FM "How many CEOs will tell you ?""Not one, but you know what I mean. What's the market missing? What do they not know that you know?FM "It's a fair question. I wish I knew the complete answer to that question and I don't. But what I can tell you is that even if we for a second ignore attention to the energy storage piece, with our production platform, the kind of growth that we have ahead of us, and the sort of cost improvements on the back of our plans etc etc I hope that the market will give us better and more recognition, and it may be thinking about it that maybe the market wants to see us execute which is why I think today's announcements particularly important because when we talk about the kind if operational improvements we have just been carrying out at Vametco and how effective they are being that breeds more confidence in the market that when we say we will produce x amount we are going to produce x amount of vanadium. We are going to meet this type of cost position we are going to achieve that, and I think that there is possibly a sense in which the market is also waiting to see whether we are going to 1) complete the Vanchem transaction and how we are going to finance it. Remember that it is only today that we announced the completion of the transaction. I'm hopeful that as this gets digested that it will reflect better in our share price but if we go downstream to the mining and to the energy piece I think that part of what we need to solve for us as a company is the fact that typically when you talk to a mining analyst and they are looking at our story invariably they will understand the mining and the processing story a lot easier than would the downstream piece which is energy focussed, and if you look at our coverage it's predominantly on the mining sector. Something which we do need to attend to and make sure that we bring in our energy focussed or (inaudible) analysis to our story which I think will have a better appreciation of the energy storage proposition for our valuation.So those are just some of the things that I think we can do. And then the second point there the point I would just highlight is that we have always indicated that we saw 2019 is the year that the key building blocks of the energy storage piece starts to come into full focus. I think that what's happened this year is that we have the rental product which we issued at the end of last year, but we only announced this first rental product this year. We are in conversation about bigger rental contracts and we announced the minigrid at Vametco. Our deployments piece, I mean we always talked about how SA will be very important market for energy storage. That was before Eskom announced that they are going to be looking to procure 1400 mwH of battery storage. That was before the World Bank announced that's they are going to be looking to deploy $1 billion which will be scaled up to $5 billion through other parties to promote 17500 mwH of battery energy storage deployments in the developing countries. That was also before the IRP was published. It was only published about a week ago, which makes very clear provisions for energy storage 2000 mw and also makes very careful provisions for renewable energy, wind particularly at just about 18000 mw and pv solar of about 8000 mw. So when you look at that and the embedded generation opportunities just the IRP, the Eskom battery programme and what I mentioned in respect of the World Bank programme, take all of that together this is not the story that's been out there for years. It's really this year that this picture is starting to crystallise, and then of course how are we going to work with the vanadium battery companies. It's only last week that we announced the VIP, the vanadium investment platform, the investment into RedT. So what I am trying to say is that we think now the pieces are there. We've put them on the table. I think going forward there will be greater appreciation of what that means for the valuation and the value of BMN and so I'm hopeful that as we go forward that will start to reflect more and more in our share price.""Can I ask you about one of your partners Eskom. Recently they've announced a sort of unbundling of Eskom in the press. Now what does that mean for you, what could it mean for you?"MN "Well first of all the unbundling process they are starting by taking out transmission and the system operator, which is actually a very good thing. It's going to create some independence so it may actually do something. Now keep in mind that unbundling in the UK had mixed results, unbundling in the U.S. And California led to the Enron scandal indirectly, so it's not always a positive experience. I think what it does say is that the Government is trying to do something differently which in itself has already a step forward. For us I think we're also a bit hedged here. On the one hand we see Eskom as a massive opportunity and we actually think that storage can help make the power system in SA more efficient. It's not just about generation. It's also about optimising transmission and distribution which covers some of these spatial differences between where electricity is generated today, from coal, and for where it will be generated going forward, which is win and solar. We think that's part of the solution to some of the challenges that Eskom has. On the other hand think about our minigrid. Not only is that to help defray some of the cost in increasing energy but also if the situation keeps getting worse, if Eskom cannot be solved, we are protecting our asset by being able to supply some of that energy ourselves. Once we have done the first phase we can go to larger phase and self supply even more. We think that other customers, especially if the situation over the next couple of years deteriorates and the unbundling doesn't help, they are going to want that as well. In either way I think we have got a lot of opportunity to ensure that electricity supply is solved for SA and batteries are going to play a massive role. And we are just right in the middle of that market. Whether it's through Eskom or through the private sector we have an opportunity to (inaudible)"FM "And keep in mind that the fact that they are unbundling (inaudible) means that they are trying to solve it, and you know what, for the utility that's actually when you want to be dealing with them because it means they are open to ideas, and if you look at this battery programme as a classical example it can only be positive."Unbundling doesn't necessarily mean privatisation, it just means it's unbundling, so in your case are there opportunities as a public company to come in and do joint ventures for some or all of the moving parts."MN "Well I think the regulations aren't really changing, so it's not creating, I think the one part where it may create opportunities is not really tied to Eskom. We've had this renewable energy independent power producer procurement programme REIPP and to date it hasn't really had storage except for CSP had (inaudible) storage. That is no longer going to be part of the programme going forward so it's only wind, PV and then some biomass, small amounts of coal, things like that. But with renewable energy you now have no way to store that energy unless you are going to talk about batteries or maybe some other kind of esoteric technologies. That to us is an opportunity because Eskom what it wants is the ability to take energy any time of the day. Renewable energy does not allow you to do that and I think with the mandate in the IRP that's really the opportunity for us. To couple storage with solar, with wind, and you see that happening in the U.S. and China quite a bit. There's no reason not.""Just to finish off on the conversation where I was talking about share price etc. two questions from your shareholders. 1) what do you think is going on with this shorting at the moment? People are trying to understand that. Have you got a view on that?"FM "We try not to pay a lot of attention to that to be honest with you. I like to think that if anybody shorts your story the best response you can have is to deliver our fantastic business economics that renders the shorter EE that potential tips the shorter out of business right? That's what you want to do and I think quite frankly that we are focussing on the right things that make sure we executing on our strategy, doing the things we said we would do, and if we spend a lot of our time trying to hunt down who is shorting our stock that's going to detract from the real value creation.""The second element with regards to the shares is because of the potential shorting some people are suggesting that your story is big enough and is well understood to maybe consider going on to the FTSE and / or the JSE. Are those considerations for you at the moment?"FM "We have said that we are working towards a JSE listing in 2020. It is work that is continuing. I think that when you consider an upgrade from AIM to say the main board in London it's something that as a company we will always consider and the benefits that come with that I think are there, particularly if you can do that and be in a position where you start to attract Index Tracking Funds we think that would bring quite a lot of liquidity to the stock and bring a lot of institutional shareholders to the stock. But again you know you don't want to do it for the sake of doing it. You've got to pick the timing correctly and at the moment our focus and our efforts have been on the JSE listing and on making sure that we are attract institutional shareholders to our register which still carries quite a substantial retail shareholder tail. By the we are very appreciative of our retail shareholders because they have been very faithful with the company and hacpve backed the company from the days when it was a one penny stock, and I think we want to make sure that we get more balance within the register, so a lot of our efforts are towards that.""FM and MN lovely to be able to catch up with you and share this story with hopefully some people new to it, that's what we are trying to get out of you today because I think it's a great story and if told properly it really stacks up, so thanks again for your time. Stay in touch and we will speak to you soon."FM "I appreciate your time and thank you."MN "Thank you." |
Posted at 28/10/2019 10:51 by zero the hero I think Neil will pull it off, however shareholders investments will be thrashed in the process so will be useless to PI's. The reason I believe he will pull it off is after re-reading the text of the last (bloody awful) RNS.The wording is far too accentuated positive, and my guess they are close to striking a deal. Have a re-read and note the insertion of text that has no purpose being there unless Neil feels its close. Why would you write this if they are just going bust, its not as if PI's can do anything while in suspension! "Proposed Merger and Fundraising On 25 July 2019, the Group announced it had agreed to outline terms, via a non-binding Memorandum of Understanding, for a proposed merger with Avalon Battery Corporation ("Avalon"). To drive the growth and development of the enlarged Group, provide working capital and take advantage of the substantial opportunity presented by the merger, the enlarged Group intends to raise at least £24m of new funds as part of the merger. redT and Avalon have received substantial preliminary support for this fundraising from a strong, new strategic investor that intends to make a cornerstone investment in the merged business, as well as from existing institutional investors in redT and both existing and certain proposed new investors in Avalon. The outline terms incorporate some interim financing to fund the business and additional costs associated with the merger process whilst it is underway. It is expected that the merger and the fundraising will be inter-conditional and complete at the same time." The rest of the RNS made for dire, dreadful reading with no attempt to gloss over the problems. |
Posted at 25/7/2019 07:52 by guppygould "To drive the growth and development of the Enlarged Group, provide working capital, and take advantage of the substantial opportunity presented by the Merger, the merged business intends to raise at least £24m ($30m) of new funds (the "Fundraising") as part of the Merger. VSA Capital, redT's financial adviser and broker, redT and Avalon have received substantial preliminary support for the Fundraising from a strong new strategic investor that intends to make a cornerstone investment in the merged business, as well as from existing institutional investors in redT and both existing and certain proposed new investors in Avalon."This has obviously been on the cards for a minute, as I stated was probably the case in the past. I note that "certain proposed new investors in Avalon" sound promising. Speaking for myself, I hope my relatively high average share price pays off. |
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