Ann: Bass Metals Operational Update, page-38

Hmmm...an interesting update, I would say a mixed one and lacking some details, containing both some good news and some disappointing news.

The disappointing news is that : 1/commissioning and ramping up of production has been slower than desired and nameplate throughput 500 tonnes per month is now expected by september 2018 ; and 2/ they didnt yet started shipping graphite to our off-taker Possehl in Europe hopefully first shipments are imminent).

The good news is that :

1/ commissioning and ramping up of production is improving steadily and there are no issues that may prevent achieving nameplate by end of this quarter.

'A number of minor commissioning issues have now been resolved and the Company is not aware of any material issues that will prevent the reaching of nameplate production within the quarter."

"rectification of minor commissioning issues will conclude this month. An incremental increase in the throughput of ore is now planned with the objective of achieving a runrate
of 500 tonnes per month of production from the Process Plant by the end of FY Q1."

2/ High quality of product already achieved and improving. In terms of quality of final product, they are already achieving consistently 94%+ purity and large flake distribution is 40%+ and is expected to improve over the next month.

3/ Sales will commence shortly from the Graphmada plant  (this july-august-september quarter), with the Company looking to be cash flow positive during october-november-december 2018 quarter.

4/ Potential off-takes for stage2 expansion to 20.000tpa+ with the company already receiving meaningful interest and enquiry regarding the sale of its intended Stage 2 production.

The lack of details concerns :

1- how many tonnes of dried and bagged graphite did they produce ? my understanding is that they only provided a wet graphite concentrate figure (623 tonnes).

2- they didnt provide any numbers regarding size of flakes, did they achieve 35mesh+ ? 50 mesh+ ? and what is the size distribution for each size category (that is important for pricing of graphite) ? they also didnt provide purity achieved for each size category of graphite stating just that overall it is 94%+.

3- they didnt provide month per month numbers usseful for investors to witness steady improvement of ramping up production and quality (previous owners stratmin were providing monthly numbers).  

Hopefully the next operational update will provide more details.

Overall, the company is making nice steady progress towards its goals and if no surprises we should expect imminent exports to our european off-taker Possehl (start of cash flow) and then achievement of nameplate 500 tonnes per month by september 2018.

Good luck and happy multi-bagger investing to all !