Hi Blitz. Thank you for tagging me in, I know you struggle with these technical announcements.
Yesterdays announcement is significant.
SYR's presentation details they can only achieve 45-55% conversion and the Chinese who are the current largest producers can only achieve 30-40% conversion.
Ecograf is achieving 60+% this is as a significant competitive advantage.
A very simple calculation for you.
Previously Results EGR required 2.15 tonnes of Graphite -100 mesh 94-95% TGC to produce 1 tonne of spherical. = The cost of the graphite feed is around US$600 per tonne -
Total cost of graphite required for 1 tonne of Spherical Graphite is $1290 per tonne.Yesterdays announcement detailed the recovery had increased from around ~50% to 60+% which means, EGR only requires 1.65 tonnes of flake graphite to produce 1 tonne.
The cost has reduced down to $990
This is a saving of $300 tonne for each tonne of Spherical Graphite produced. This will have a very positive effect to the companies NPV.
Super BAM
The following image is from EGR's 2019 study. this shows the percentage of different spherical graphite produced.
It appears EGR will produce around 25% - Super BAM and at least 50% 15-16 Micron Spherical Graphite.
What we don't know.
- Does EGR have spare capacity to purify the additional 4,000 tpa of spherical graphite, or Could EGR now use higher TGC graphite feed, which reduces the amount of chemical purification required freeing up the capacity to threat the additional 4,000tpa?
- if there is spare purification capacity, the additional 4,000tpa of spherical graphite will generate around US$10.6 mil in additional revenue.
- how much Super BAM is Kwinana likely to produce, if Super BAM is 10 micron spherical graphite, this achieves higher pricing of US$4,400+ per tonne vs the 15-16 micron spherical graphite at $3250 per tonne - that is US$1150 more per tonne and it is likely that EGR will produce around 10,000t per year = US$11.5mil in additional revenues over the companies 2020 study.
I am sure you can work out both of these will have a significant impact on EcoGraf's NPV and future shareprice.
