StratMin Global Resources (LON:STGR, 3.0p) - Speculative Buy
StratMin Global Resources, the graphite production and exploration company with assets in Madagascar, yesterday announced continued success on its on going operational improvement programme at its Loharano operations. The Group announced that it has completed the current stage of refurbishment including upgrade to primary mill, enhancements to the floatation circuit and commissioning of new dewatering equipment. The final stage will entail new milling and drying units as well as a new mining fleet, funding will be from the proceeds from the transaction with Base Metals, which is due by the end of March 2016. Despite heavy rains in January the plant has been running continuously and in February has +94% TGC grade concentrate, on demand and at volume for the first time. Mining has now moved to the adjacent Mahefedok area for bulk testing and final engineering and design input for the planned new plant. StratMin's JV partner, Tirupati has received the mining licence approval for the Vatomaina property and is waiting for environmental signoff to begin project development.
Our view:
We are encouraged with the continued operational improvements, which have been completed without a break in production. The proceeds received from the Bass will allow StratMin to fund the final stage of refurbishment. The investment agreement with Bass has greatly reduced the financing risk for StratMin and we look forward to further updates from the Loharano operation. We are also encouraged with the increase in sales with new buyers from India, Germany and Austria and note that product samples have been approved by end users in Europe which could lead to additional sales in the near term. As such, we maintain our Speculative Buy on the stock.
BSM Price at posting:
1.0¢ Sentiment: Buy Disclosure: Held
