50. Bushveld Minerals
Bushveld Minerals’ (BMN) mad dash into this year’s Aim 100 would have been even more spectacular had vanadium prices not fallen 60 per cent since their December peak. But the residual glow from its massive price ascent in recent years means the South Africa-based integrated producer is still a favourite among mining investors.
This year, shareholders have been guided to expect a dip in output from the Vametco mine, even as Bushveld continues with a multi-year plan to quadruple the site’s vanadium pentoxide production. Elsewhere, progress on the financing of the greenfield Mokopane project could present a major catalyst. However – notwithstanding the $68m (£52.3m) cash-flow-funded purchase of the Vamchem vanadium plant – the stock is likely to remain geared to the volatile swings in the vanadium spot market, which is torn between sluggish demand and medium-term supply bottlenecks.
Following a 28 per cent downward revision to its 2019 ferrovanadium forecasts, BMO Capital Markets recently cut its earnings estimate for Bushveld to 5p a share, rising to 7p in 2020. That puts the shares on a cheap multiple, although we’re back on the sidelines until the vanadium price stabilises. Hold. AN
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