I originally invested in Kibaran Resources because of Epanko. I anticipate our mandated banking partner KfW IPEX to submit the untied loan application to the German Government before the end of September and full funding for Epanko to be delivered before the end of the calendar year. Price target $0.30 before Christmas.
EcoGraf is a bonus which will add tremendous value for patient long suffering shareholders. My take as follows:
1) The Pilot Plant Program (PPP) was approved by the Kibaran Board in December 2017 and consisted of three stages: a) Flowheet optimisation b) Product testing as part of due diligence for Chinese, Korean and Japanese anode manufacturers c) Pilot Plant Expansion. 2) The first two stages of the PPP have been achieved with modest expenditure sourced from working capital. 3) The third stage (pilot plant expansion) appears to be on hold and may never eventuate - reason being it is unfunded. The company announced in May 2018 that it had applied for a $100K grant from the German Government and it was "pursuing other grants and government funding initiatives in Germany" but apparently the necessary funds were not made available. The pilot plant expansion involves construction of a 600 tonne per annum facility. Stages 1 and 2 above were probably carried out with laboratory scale equipment capable of producing 10 or 20 tonnes per annum (my guess). Given that a 5,000 tpa commercial scale EcoGraf plant will cost US$22 million then I can't see much change out of $4 million for the 600 tpa expanded pilot plant. 4) I am not concerned with the lack of progress for the pilot plant expansion because in my opinion it's not a necessary step to progress to full commercialization. 5) Whilst Epanko was in a holding pattern awaiting the Tanzanian Government to legislate the new mining laws, the company used the opportunity to perform EcoGraf product testing on multiple graphite sources from around the world. This has been done with working capital. Given the success of the program the company has far more leverage in its efforts to commercialize the technology. 6) As much as EcoGraf can be a stand alone business, funding will only flow when Epanko finance is locked in. This is my opinion only. 7) Demand - refer to the link below. Between now and 2023 there are plans to construct an additional 180 GWh of lithium ion battery manufacturing capacity. That will require an additional 180,000 tonnes of 99.95% pure graphite (one kg required per Kwh). Some of that will be synthetic graphite (mostly for renewable storage) whereas the remainder will be spheronized natural graphite (Electric Vehicles). If the split is 50/50 then 90,000 tonnes of anode graphite needs to come from somewhere between now and 2023. EcoGraf is more than cost competitive with Chinese battery anode suppliers and the Europeans are likely to favour batteries manufactured with as minimal an environmental footprint as possible.
