Capraise,
You are stating the obvious if your in the Battery Graphite Market, WKT is NOT in this market.
WKT is in the EXPANDABLE Graphite Market.
Strongly suggest to go do the research and first of all understand the differences in Graphite and Graphite Deposits. Take into account High Grades, Low Capex, Low Opex, Flake Size Distribution and the associated Free Cash Margins. It will aid in also understanding the derisking opportunity that all Funders will demand to see.
You simply can not compare companies supplying different graphite fractions as being in the same Graphite Market.
The lowest fraction (smalls / fines) graphite product range that is suited for the BATTERY Graphite Market is in oversupply today and has the lowest graphite price. The oversupply today will get absorbed in the future and these prices will rise in the next couple of years IMO.
The other higher fractions ( large / jumbo / super jumbo ) graphite product range is suited for the EXPANDABLE Graphite Market and is not in oversupply today and has MUCH HIGHER graphite prices.
The global demand for Expandable Graphite is going to see prices rise much higher for the higher fractions in the coming years.
Ever so important to understand that the Battery Graphite Market is totally different to the Expandable Graphite Market and simply should not be compared.
You will not see another SYR ever be self funded again as their business model was flawed from the very beginning and never financially stacked up.
Early SYR investors and brokers, were ignorant participants as there simply was not a lot of data around to compare and understand the complexities of graphite. The SP was truly overcooked as being the potential major supplier outside China for Graphite in Batteries.
The SP in Aug 2017 was just under $4 and now 2 years later has recently dropped to 63c.
I recall when SYR Aug 30 2017 received there Mining Agreement when I was researching Graphite and it was very apparent to myself at the time TO NOT INVEST in SYR as did not add up.
Very costly mistake for the early SYR Graphite Investors as they simply did not understand the graphite deposit, the project economics and the differences in graphite prices.
SYR today demonstrate HOW THEY ALL GOT IT WRONG being in the Battery market. High Capex, High Volume Processing with little or NO Free Cash Margins simply doesn't work at the Battery Grade Prices of today.
WKT at least has a low enough Capex to be self funded compared to other Graphite Companies, plus WKT has a very robust financial model that will be highly profitable with rapid payback of the debt that also makes her eligible for debt funding.
WKT will actually be profitable from the beginning as we are in the more profitable Expandable Graphite Market, where as SYR is still Cash Burning and perhaps will at least be breaking even in the next couple 12-24 months at best.
To also put into perspective WKT will be soon entering the ASX 300 and when we reach production and prior to expanding the 40K TPA to 80K TPA we will have entered the ASX 200.
WKT will expand well beyond the initial Self Imposed 40K TPA in the future and so will her profits as Graphite Prices rise across the entire Graphite Product Range and as we grow into known Expandable Graphite Markets.
The future growth is there and more Expandable Graphite favoured deposits will be required for many years to come.
That future growth in the Expandable Graphite Market will also come about when the BUYER has the confidence that they can source a constant supply of high quality product so then they may INVEST in building new manufacturing plants or expand existing expandable manufacturing plants.
* BIG GIANT HINT FOR YOU.
Pay attention to our first 2 Binding Offtake Agreements.
1 is building a NEW manufacturing plant and the other is EXPANDING their existing manufacturing plant.
Demand is not weak, it needs to be carefully synchronised to the buyer who sees and know the demand that makes it worthy of them to make the appropriate investment into their manufacturing plants.
Research and Understanding is KEY to see it and know it and due to the complexities of Graphite is quite difficult to comprehend, which is why I wrote my report back in May.
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