Proactive Investors - Run By Investors For Investors

Bushveld Minerals one of 'luckiest companies' around after vanadium rally says broker

Vametco is one of the cheapest primary producers of vanadium in the world says SP Angel
picture of steel mill
Vanadium is a steel additive

Bushveld Minerals Limited (LON:BMN) is in prime position to benefit from lower vanadium production at mining giant Glencore International (LON:GLEN) according to its broker SP Angel.

Prices of the steel additive have risen by 11% over the past month and are up by 150% since Bushveld agreed to acquire the Vametco vanadium business in South Africa.

That timing makes Bushveld one of the luckiest companies it knows, added SP Angel.

It timing has been ‘spectacular’ in terms of agreeing the acquisition at the bottom of the vanadium market and then completing the deal as prices take off. 

“Vametco is one of the cheapest primary producers of vanadium in the world, realising an all-in cash cost of US$17.33/kgV (US$3.57/lb V2O5equivalent) for the year 2015. 

“We reckon the business should be substantially cash generative with prices now at $6.07/lb. 

“Our modelling shows the plant to be highly leveraged to the V2O5 and FeV prices. Profitability should also be helped by further falls in the South African rand.”

The broker adds that vanadium prices should remain supported by rising demand for hardened steels and lower levels of secondary vanadium from magnetite and slag production.

Buy with a price target of 11.6p in SP Angel’s view.

Shares were little changed at 8.2p though they have risen by more than 300% this year.

View full BMN profile View Profile

Bushveld Minerals Limited Timeline

Related Articles

picture of steel mine
The company has just agreed to spend the best part of £12mln on the Vametco vanadium mine next door to the company’s own deposit at Brits
November 18 2016
Anglesey is the owner of the Parys Mountain underground zinc-copper-lead-silver-gold deposit in Wales, where it is updating earlier scoping and economic studies.
May 19 2017
Strategic Minerals has a diversity of assets, including the Cobre magnetite operation in New Mexico and the Redmoor tin and tungsten project in Cornwall

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use