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Bushveld re-rates again

Shares in the vanadium miner, energy storage firm and coal champion have continued their spectacular ascent
September 27, 2018

Bushveld Minerals (BMN) is a curious business. On the one hand, its energy division is at the forefront of energy storage, and its vanadium redox flow battery project at Eskom has just won a $0.5m (£0.38m) grant from the US government. On the other hand, following the award of a 30-year concession, it is pressing ahead with a coal-to-power project in Madagascar.

IC TIP: Hold at 31.5p

In the middle is a wildly profitable vanadium mine. Thanks to a spike in prices in the steel-strengthening agent, and only a mild rise in operating costs, consolidated group post-tax profit leapt to £21.1m in the first half of 2018. From this – and a £15.7m fundraising when the shares were trading at a lowly 10.3p back in March – Bushveld has found enough cash to boost its share in the Vametco mine to 75 per cent.

Such wide margins have not gone unnoticed by workers, as a recently settled strike attested. The extra price of this is likely to be a hit to both production and costs in the second half, to say nothing of any change to South Africa’s mining charter, the imminent arrival of which was lauded for its potential to provide “clarity and direction for investors”.

BUSHVELD MINERALS (BMN)  
ORD PRICE:31.5pMARKET VALUE:£ 350m
TOUCH:30.5-31.512-MONTH HIGH:32pLOW: 6.8p
DIVIDEND YIELD:NILPE RATIO:41
NET ASSET VALUE:7.2p*NET CASH:£26.2m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2017nil1.10.26nil
201862.130.71.14nil
% change-+2802+338-
Ex-div:n/a   
Payment:n/a   
*Includes intangible assets of £43.4m, or 3.9p a share.