Ann: Update on Epanko Graphite Project and Pilot Plant Strategy, page-59

First 59 Last

Share
Profile

Follow
cazz69

10,002 Posts.

544

27/02/18

07:55

Post #: 31365385
Share

Originally posted by cartex ↑

DC1234:

You have asked the most important question in the graphite space today, how to fund a new graphite start up with no tangible assets except a resource, commercial production, documented sales history, and / or take or pay contracts?

The analogy of the chicken or the egg has been used in many graphite new start board, senior management, and investor discussions; all focused on ways to achieve funding with most focusing on debt facilities as their current cash position and market cap makes it near impossible to achieve.

I have been part of many of those very discussions, and the most truthful answer is a new start needs a private cornerstone investor or as one new start successfully achieved through significant equity raise. Yet, if funded through equity, then comes the true test if the new start can meet it commitments to the market, investors, and develop a position as a supplier in an ultra competitive industry.

The current debt climate, private lender sentiment, bank loan requirements, high coupon rates, exorbitant royalty schedules, accelerated pay back time frames, put available funds into an unachievable state.

Almost all new starts believe they can come into the market unabated, all focusing on battery or fire retardants as examples as their mainstay of success, when those very markets are in the top most difficult to supply.

Focusing on graphite fundamentals first, expanding from there as experience develops, and if lucky to be funded, then building, commissioning and producing commercial concentrate...that is when the real challenge begin.

Expand

You make a fair point there. KNL are doing all they can and if the Tanzanian mining regulations don't prove too big a sticking point, then you could well see the green light from their funding partners and the first graphite startup to gain finance. Not a fait accompli by any stretch of the imagination but KNL have certainly crossed all the i's and t's from their end!

KNL Price at posting: 15.0¢ Sentiment: Hold Disclosure: Not Held
5 Upvote

0 Great analysis

Reply

Top Stories

NVU

Nanoveu surges 10% after benchmark testing for new AI chip begins

MTH

Mithril's drilling in Mexico picks up silver at 997g/t, gold at 28g/t

IRX

InhaleRX snags $38.5M in funding from VC biotech funder Clendon

TLG

Talga Group wins key permit for flagship graphite mine in Sweden

SWP

Swoop lobs $18M offer at microcap telecom Vonex – in which it holds 19.9%

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

Week 42 Wrap: HotCopper's top picks; new ASX 200 record; world yawns at war

SNX

Sierra Nevada raises $2M for silver exploration at Blackhawk

M4M

Macro, Norden set up transport solutions initiative for West Pilbara

What's causing the cost-of-living crisis, and how to navigate it