Key points:
- Bushveld Minerals (BMN) shares are down 30% in 2022.
- The vanadium miner’s prospects remain pretty promising.
- However, I would wait for a rally before buying BMN shares.
The Bushveld Minerals Limited (LON: BMN) share price has fallen 30% in 2022 despite making several important announcements during the past free months. BMN shares have fallen 50% from their March highs, driven by negative investors sentiment toward the vanadium producer.
How far can Bushveld Minerals (BMN) shares fall? And is there hope for a recovery? Let’s try and answer these critical questions as savvy investors before deciding whether the company could make an attractive investment target or not.
Also read: The Best Uranium and Uranium Mining Stocks To Buy.
Earlier today, Bushveld Minerals announced that it had secured funding for its Vametco hybrid mini-grid, owned by its subsidiary Bushveld Energy Limited. The firm has completed the development and financial closing of the 3.5MW solar PV combined with a 1MW/ 4KWh Vanadium Redox Flow Battery (VRFB) hybrid mini-grid project.
The project shall operate as a funded independent power producer (IPP). Bushveld Energy had partnered with NESA Investment Holdings, a South African investment firm. NESA has provided 60% of the equity, with Bushveld putting up the remaining 40% equity to fully fund the project, which is managed via a special purpose vehicle (SPV).
Bushveld has secured a ZAR64 million ( US$4.1 million) loan from ABSA Bank to fund part of the project, which is estimated to cost ZAR113 million ( US$7.1 million). NESA Power will build the project as a turnkey project.
Other recent developments announced by Bushveld Minerals include signing a 5-year wage agreement between Vametco and the Association of Mineworkers and Construction Union (AMCU) to help prevent worker strikes at the Vametco mine.
The low-cost vertically integrated vanadium producer also issued an updated mineral resource, and reserves estimate for the Vametoc vanadium mine. The report showed that Bushveld has slightly depleted the ore reserved at the mine from 267,200 tonnes in December 2020 to 262,000 tonnes in December 2021.
From the available ore reserves and the current depletion rate, it is clear that the Vametco mine has quite a long operating lifespan unless some drastic changes occur. Therefore, Bushveld’s prospects are pretty promising. Still, I wouldn’t buy BMN shares until we get a strong rally indicating that the downtrend might be over.
*This is not investment advice. Always do your due diligence before making investment decisions.
Bushveld Minerals share price.
The Bushveld Minerals share price has fallen over 50% from its March highs but is down 30% since the year started.