IMHO, TON is one of the best longer term investments due to the following reasons -
1) Market capitalization of Mining Companies with gigantic reserves –
Gold – NCM 10 billion
Iron, energy, etc – BHP – 105 billion
Iron – Rio Tinto – 27 billion
Oil – Saudi Arabia – not a company but just the presence of massive oil reserves has made Saudi into a huge economy
Graphite – Syrah – 0.8 billion
Graphite – TON – 49 million…..hmmmm...no comments
2)
Mine life – Massive as discussed above. Largest in the world. There are zero concerns about TON running out of graphite
3)
Purity – One of the best in the industry
4)
Flake size – Lots of samples were very large and lots of potential to identify much more. Triton has capacity to meet requirements of all sizes
5)
Skin in the game – Directors own 13% of the company as per latest presentation. There is good skin in the game and a strong interest in ensuring TON does well. The directors know that they could be billionaires some day if they take care of the company.
6)
Cash position – Managed to get funding and only need to continue on this track
7)
Shareholders – Top 20 represent 45% of the company. This is decent backing from major shareholders
8)
Management – As mentioned earlier, there is good skin in the game. I’ve personally met BB at one TON presentation. He is a cheerful chap and seemed very passionate about TON, and happy to answer all questions. If anyone has any issues and questions, I think he will be very happy to answer. I’m also happy to have someone from a legal background as our MD, as that helps with the finer legal aspects as TON becomes larger, and is in the growth stage.
9)
Off takes – Discussions with several potential partners. It is a matter of time before something clicks. Impact on share price will be huge over time.
10)
Emerging uses of graphite – Massive scope for graphite market to move up several multiples – batteries, super strong graphene products, electronic vehicles, solar energy, etc. Solar energy itself is capable of disrupting many industries, and create fresh demand for graphite which we cannot even think about right now
11)
Other minerals besides graphite – Vanadium, zinc, etc.
12)
Capital intensity – Capex / tonne of production of Triton is the lowest amongst peers
13)
Cost – With its massive mine life, Triton can undercut almost anyone and everyone and even operate at a loss (which won't happen) for some years. Just look at the iron and oil markets right now to see how much impact large producers can have on other players in the market.
14)
Future synergies- Due to proximity of mines, there is huge potential for TON and SYR to even merge some years down the line, and become an absolute giant. Of course, it is very early days
15)
Conclusion – I’m very bearish on the overall market and global economy. Currently, I only like gold and gold shares because they have huge long term FA upside, and are severely undervalued as everything else is overvalued. The only other stock which I like is TON because of its massive upside potential. Just look at Paladin energy (PND) and Fortescue (FMG) charts when they were taking off in the last decade to see how much upside potential TON has in the long run.
Of course, there could be pain for some time with the price fluctuating sideways, but this could be a multi billion dollar company 5 years down the line if it only hangs on through the tough times.
It is selling so cheap right now only because of some uncertainty, because several investors don’t have the patience to hold on for years till production, timing difference with SYR, and concerns about future funding.
IMHO, only 2 valid issues would be concerns about future funding and broader issues of overvaluation of global markets and other bubbles bursting. Due to massive positive risk/reward ratio, IMHO, TON is a must have component of one’s portfolio. The only issue is how much. Other overpriced stocks are far more risky.
There is a good article online where famous resource investor and current gold bull Rick Rule talks of PDN being one of his best investments where he originally purchased at 10c and topped up at 1 c – that was not a time to sell but to buy more and average the cost. PDN eventually rose to over 10 AUD – 1000 times from its low in some years.
Wishing all current and future TON holders the best.
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