SYR 4.00% 24.0¢ syrah resources limited

where will it stop???, page-45

  1. 287 Posts.
    TJ, thanks for posting those IMs. Always interesting to see how others do things...

    As I mentioned before, I feel the downside impact on the SP will be limited from here on, and I still stand by this comment. Wrap platforms, such as Macquarie, require almost immediate 'next day' processing of redemptions. See: http://static.macquarie.com/dafiles/Internet/mgl/au/docs/faqs/sma-faqs.pdf?v=5

    That's why we've seen the sort of indescriminate selling so far. But those other funds you've linked appears to have redemption timetable between 10 business days to quarterly. So even if additional redemption occurs - it should be more orderly (hopefully)...

    But even if it isn't orderly, being a pragmatic investor, I don't see why the market wouldn't absorb all the selling. SYR's investment thesis hasn't changed. Let's revisit:

    - 70% IRR
    - Support of the Mozambique government to the extent that the mining lease was granted under more favourable 'old mining laws'
    - Maiden resource alone enough for 40 years mine life
    - Spherical graphite positioning in the USA
    - Vanadium credits alone can justify currently SP
    - First divvy as early as CY17/18?

    Risk is obviously all geopolitical. However, Mozambique is quite stable and is one of the 'winning' African countries: http://www.afdb.org/en/countries/southern-africa/mozambique/mozambique-economic-outlook/

    I don't think people realise that the most important market release in the past month is NOT the DFS, but the confimation in writing regarding the mining concession. Correct me if I am wrong here, but no other Mozambique graphite company except SYR have been granted this type of concession. The DFS merely confirms what we know already. The mining concession is sufficient reason not to invest in other Mozambique graphite projects - given under the new mining law, the government will have the right to acquire a 5-15% equity stake, and 20c in every dollar above 18% IRR.
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