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Bushveld Minerals Shares Are Trading Flat for the Year, Is There Upside Potential?

Simon Mugo trader
Updated 22 Jul 2021

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Bushveld Minerals logo

Shares of Vanadium mining company Bushveld Minerals Limited (LON: BMN) are trading flat for the year after falling from the 12-month highs hit in early January despite making several positive announcements since the year started.

The company revealed that it expects to mine more Vanadium this year than last year, with initial estimates ranging between 4,100 million tonnes of vanadium (mtV) and 4,350 mtV.

The miner also clarified that the strong demand for Vanadium witnessed in Q4 2020 has continued in 2021. The rising prices noticed recently result from the strong demand for the commodity amid tight supply conditions.

Bushveld warned that the expected surge in production would materialise in H2 2021 due to the 35-day maintenance shutdown of its Vametco plant located in South Africa scheduled for Q1 2021.

The company had cash reserves of $50.5 million at the end of 2020, which was more than adequate to cover its capital expenditures for 2021, totalling about 540 million South African rands (approx. £26.5mln), with most of the spending being denominated in rand.

From a technical standpoint, the company’s shares bounced off a significant resistance level in mid-February, indicating considerable upside potential if the level holds over the next few weeks.

Bushveld is well-positioned to capitalise on the high demand for Vanadium combined with its plans to significantly up its production capacity over the medium term, which is why I am long term bullish on the stock.

I’m hesitant to open a new position at current prices since the price is quite far from the resistance zone, and I’m hoping for a pullback much closer to the level before jumping in.

Bushveld Minerals share price.

Tradingview chart of Bushveld Minerals share price 05-03-2021

Bushveld Minerals shares are trading almost flat for the year, is there more upside potential?

Should you invest in Bushveld Minerals shares? Bushveld Minerals shares are traded on the AIM market of the London stock exchange (the alternative investment market) which is the sub market specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Bushveld shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading