Addressing recent concerns

I just thought I’d address some recent concerns to the best of my ability. I’m not surprised again that as always most concerns raised on TON are by non holders. TON is very lucky to have so many non holders concerned about our welfare and have restored my faith in humanity.

1) Concern - What happened to the drilling results

I thought that this issue was already addressed some time back by @PabloP and @Pauldola

PabloP -
http://hotcopper.com.au/threads/wha...ling-results.2527945/page-45?post_id=15526086
http://hotcopper.com.au/threads/wha...ling-results.2527945/page-52?post_id=15527821

Pauldola
http://hotcopper.com.au/threads/wha...ling-results.2527945/page-17?post_id=15511518
http://hotcopper.com.au/threads/wha...ling-results.2527945/page-34?post_id=15517371
http://hotcopper.com.au/threads/wha...ling-results.2527945/page-38?post_id=15525320
http://hotcopper.com.au/threads/wha...ling-results.2527945/page-41?post_id=15525916

Some excerpts from their comments (Please read the whole comments completely though if I have skipped something material)

“Let's be clear here - the resource is not governed by Triton, but by the "suitably qualified person" who in this instance is independent to the company - i.e. from Optiro.
You are suggesting that his strings etc are wrong? Have you seen the model?  Are you more suitably qualified than the Optiro person with all the available information?” – PabloP

“This resource is more like a continuous ore body, coal like in nature, more than a metal orebody where the wireframes and boundaries are a very different kettle of fish to model.  Also, It is not a veined body.....  Subsequently the framing of this body does not necessarily need to connect the "high grade veins" you are referring too, as long as the cut-off grades etc are appropriately applied to the blocks and frames”. - PabloP

“A company must promptly report any material changes in its Mineral Resources or Ore Reserves.
So if the drill results are back, and they are materially different, then the company needs to let the market know under the requirements of JORC and the ASX.  They can not hold these back.” – PabloP

“a JORC2012 resource is available for all to see and compliant.  Move on from connecting the "veins" as this is irrelevant to this particular model as it is the cut-off grade that affects the model more.  Yes high grade increases a blocks grade, but in this instance it only really comes into the economics and mine planning” – PabloP

“So, IMHO of course, TON is being prudent with the way they are spending money and undertaking the feasibility studies” - PabloP

“Now ask yourself this, if Triton put out a resource update today for example and then put out a further update in a few weeks down the line would it look quite silly and a waste of time? Surely you must see the logic in this?” – Pauldola

“Thin Veins? Your intention is to make it sound like the Higher Grade veins are surrounded by non graphitic material.
It is continuous Graphite mineralisation with very very little gneissic bands/non graphitic waste” – Pauldola

“For the first approx 5 years of Nicanda Mining will literally be stripping out the side of the Hills at a strip ratio less than 1:1” - Pauldola

“Ton could theoretically skim the surface of the Nicanda resource to say 50m depth, for decades.” – Pauldola

2) Concern - TON is hyped

Sorry, I fail to understand how pointing out that a company with market cap of 100 million is a good buy is hype. And yet, the same people calling TON hype have nothing to say about a company with market cap 6-8 times that of us? If TON is hype, what then do you have to say about peer companies, if anything at all.

Peer comparison is one of the most common and accepted forms of FA by everyone including brokers, analysts, etc.
I’ve recently highlighted the terrible peer imbalance showing how undervalued TON is
http://hotcopper.com.au/threads/peer-comparison-calculations.2600092/?post_id=16039563

I’ve highlighted how the peer comparison is very relevant and in fact TON has done all that the peer has done and more
http://hotcopper.com.au/threads/peer-comparison-calculations.2600092/page-49?post_id=16063065

If people want a broader overview of TON, that too is available, and further updates are available in my comment history
http://hotcopper.com.au/threads/ton-overview-aug-21.2577980/?post_id=15853778

When talking about hype, one would obviously be referring to FA. Well, I’ve spelt out the FA above. I fail to see any hype and TON’s fundamentals are clear as light, on every metric possible

3) Concern – TON needs insto support

Valid point and I myself have never shied from this point since the start. I’ve always said that TON needs to sell itself to instos are there is no backing away from this
I look around and see peer companies being bought because instos are supporting it. The question is how long will instos support it? We recently saw the analogy of elephants jumping out of a pool and what can happen to share price if instos move out.
http://hotcopper.com.au/threads/next-four-weeks.2603218/page-25?post_id=16083293

Instos are ultimately concerned with making money, and I’ve illustrated in the recent past how instos have all the reason in the world to support TON.

4) Concern – TON in downtrend

One of the great TA lessons I’ve learnt from MNS holder @Tradergimp is that TON is in a perpetual downtrend while MNS is in a perpetual uptrend.

Perhaps, it is more appropriate to say that TON is in a trading range and here are some very good charts by @mitta and @Dr.Seuss
Here are some comments from @mitta that I fully agree with that TON is in a trading range – seems to be 22.5 to 32.5.
http://hotcopper.com.au/threads/chart.2558416/page-121?post_id=15978698
http://hotcopper.com.au/threads/chart.2558416/page-190?post_id=16020395

And here is @Dr.Seuss chart
http://hotcopper.com.au/threads/chart.2558416/page-120?post_id=15977167
http://hotcopper.com.au/threads/chart.2558416/page-72?post_id=15961511

From what I understand, Dr.Seuss trading range was 22.5 to 34 while mitta’s range was a little tighter at 22.5 to 32.5
Once more - I fully agree with mitta and Dr. that TON seems to be in a trading range

Following are some graphite stocks
TON SYR LMB KNL MNS MOZ MTA TLG BUX LML AXE SER MRF WKT IXR BBR

Check them out and most of them are down from their highs and in some cases very materially. So, Tradergimp points out that TON has gone down from highs but this is not just limited to TON but generally all graphite stocks and in fact all commodity stocks. I just showed few days back how even commodity giant Glencore lost around 80% in a year.
MNS might have been the exception but then it is key to note that MNS was starting off from a very low price last year, and hence the rise. I don't want to take away any credit from MNS but I noted some time back that MNS diluted market cap is around 250 million compared to TON's 100 million and TON is hence very cheap still, compared to all super pits.

I'll just highlight when I started commenting on TON
Date of my 1^st analysis  - Sat March 7
Last close (March 6) of
TON – 15.5 – current price of 23.5 – up by 52%
SYR – 4.72 – current price of 2.65 – down by 44%
MNS – 27.5 – current price of 43 – up by 56%


There are ups and downs in  share price. I’m not going to deny that I would have loved to have sold at 71c and bought back now, but it is very hard to predict these things. What I do now is that on pure fundamentals, selling now seems plain silly. It is important also to note that many TONners are all gloomy about the company’s share price despite improvements being made in share price and market cap over time.

5) Concern – No news from TON in recent time

Excellent. I hope that there is no news. This is what I said some time back (Aug 17) in my conclusion
http://hotcopper.com.au/threads/potential-funding-sources.2574148/?post_id=15822388

“”Just a small note on the share price- Yeah sure, I’d like TON to be 1$, 2$ or more right now but Rome was not built in a day. We cannot expect the management to manufacture news for us. Personally, I’m least bothered as to whether or not there is any news and a part of me is even hoping that there is no news for a long time, because it would then ensure that there is a flurry of news at one time eventually, leading to a much sharper rise. In the meantime, I always have an option to top up, cash balance permitting of course, as weaker hands exit TON.
Shares go up and shares go down. This is part of the game. Management is attempting to build a company that could potentially be a life changing decision for patient shareholders. I titled my very first analysis many months back in March as “TON – one of best long term investments” because that is the only way I see it.
I would be very disappointed if management were to change their approach to pacify us on a day to day basis and am hoping that they continue focusing on building a great life changing longer term project.” – excerpt from my old comment

I still stand by that comment. As can be seen, good news since then has had little impact on share price. IMO, everything will be taken care of once TON handles the biggies – funding and insto support. These are the main areas that I’ve always said that TON needs to focus on, for a sustainable share price. Like I’ve also said earlier, these 2 areas are mostly dependent on fundamentals and TON has ticked off all the other boxes, which leads me to believe that TON is probably handling these in the background as we speak

6) Concern – Macro fears

Sorry mate. I never thought I’d see this but I actually did see this being raised that holding TON could be bad in current macro environment. Did anyone from any of the other graphite company forums ever highlight macro concerns earlier? I don’t think so. I know that I was one broken record who kept on warning TONners and everyone that macro concerns could be big in the time to come. I’ve just recently discussed how overvalued companies have much more to fear than grossly undervalued TON as investors would ideally sell off far more overvalued companies first, than TON which has much more good news to come
http://hotcopper.com.au/threads/next-four-weeks.2603218/page-19?post_id=16082323

7) Concern – we’ll never get insto support

The share market is a tricky game because it is not just based on fundamentals but also sentiment. A good example is a diamond company which many HC commenters might have heard of in recent times. The share price seemed to be languishing for long and has then suddenly tripled in the last few sessions. I’ll take TON’s example again of the March movement and how it quadrupled in a  few sessions. If people have the ability to time to perfection, then more power to them, but if not, then this share price seems pretty cheap on every metric.

As can be seen, the market cap and share price has substantially risen from the depths of last year, which means that TON is getting some recognition. Again, just look at the Industrial Minerals analysis of TON in the graphite space and see how it is getting more and more recognition over time
http://hotcopper.com.au/threads/ass...-credentials.2560732/page-26?post_id=15709668
http://hotcopper.com.au/threads/ass...-credentials.2560732/page-56?post_id=15715171
These things take time, but when they do happen, it is almost too fast for the average investor to react.

8) Conclusion –

IMO, there is no logical reason for the share price to be where it is right now.

If one says that TON needs to get insto support, then I agree but surely a lot of instos can see the obvious right now and TON is obviously on their radar. TON needs to continue to focus on funding and insto support  and I’ve always highlighted genuine issues like these. But the fundamentals are so good, that I can’t see how TON will be unable to convince the instos. If TON needs to be afraid, then I can only imagine what is due for far more overvalued peers, and wonder why people are not raising any issues there.

TON has a lot of good news in months to come including the all important DFS, which continues to make me believe that a March type upwards movement cannot be ruled out. TON has to determine how to use all their good news as best as possible, in terms of a potential capital raising at an appropriate substantially higher price .

I’ve tried to address some concerns to the best of my ability. Of course, there is no guarantees about share price and share price always goes where the instos want it to go.