Ann: Bass continues successful commercial ramp up at Graphmada, page-45

To keep on-topic I copy this post here from the other thread :
@Cham "Thanks Doc.. it was a good reminder how much Stratmin spent on the project before Bass bought in….it is also a reminder of how costly and risky early startups can be…..so what was Stratmin's shareholder's loss was our gain….so you could say with some smart footwork by our director's and patience by us shareholders that it is no surprise that we have a 100% owned debt free company that is on the cusp of becoming cash flow positive.

We are still waiting for confirmation of plant throughput and I would think some investor's will be wisely biding their time.

Question for you Doc?….I reckon you have a fair stake in Bass? -"

Hi, I followed the story of the graphmada mine since stratmin days, and IMO stratmin management did so many mistakes, and BSM wasent just lucky they took advantage of opportunities, worked hard and took the right decisions. IMO the stratmin main mistakes were the following :

1- lacking experience/expertise in mining engineering they didnt do good due diligence and allowed themselves to be cheated when they acquired the mine from previous owners in 2012-2013 on the basis that it was a 12.000tpa mine. the first year of production (2013-2014) they did only 200 tonnes and achieved only sub 70% purity graphite, they discovered that the initial flow sheet was deeply flawed and that the mine (newly built at the time) needed substantial upgrades and refurbishment in order to produce commercial quantities of graphite.

2- stratmin management (especially the subsequent selected CEOs by the board but also the chairman) were financiers with no background/experience/knwoledge whatsoever in mining engineering. The graphmada graphite mine clearly needed experienced/professional miners/engineers with strong background in the field such as what BSM board did by selecting Tim Mcmanus as CEO.

3- stratmin management lacked a hands-on approach to managing the graphmada mine. they managed the mine most of the time from their headquarters in London, instead of getting down and dirty on the ground in Madagascar and try to solve problems and supervise operations in real-time. BSM management on the other hand thrive on the hands-on approach to operations and management and the CEO spends most of his time in Madagascar not in his comfy country and home in Australia.

4- stratmin spent capital unwisely and burned through tens of millions of dollars on salaries, administration costs and board members remunerations, instead of rationing expentidutres and spending the capital on necessary equipment in Graphmada, until their reputation was tarnished and they lost market confidence and support of financiers and the ability to raise capital in london. BSM management did the opposit, they reduced unecessary administrative costs, and focused on graphmada needs of capital. One of the reasons behind different phlosophies is that unlike stratmin management, BSM management had much more skin in the game, they operated much like owners-operators and hence their interests were and still are in accordance with shareholders interests.  

It should be noted that stratmin just before they lost access to capital were on the right track (but it was too late for them) so True, BSM management learned from Stratmin mistakes running (or rather mismanaging) the graphmada mine and operations, benefited from plans stratmin put in place just before they ran out of cash and were determined not only not to repeat stratmin mostakes but to improve and innovate in terms of solutions and planification. IMO BSM management did a much better job than stratmin management best efforts (their last months in 2015 - beginning of 2016) to steer the ship in the right direction, and their experience with mining eengineering and hands-on professional approach to operations will IMO result in big gains to patient long term shareholders.   


Hope that helped,