Okay.. A lot of discussion which is good....Firstly, the Tesla...

Okay.. A lot of discussion which is good....

Firstly, the Tesla interview.. I think we should all sit back and relax, look at the contradictions in the announcement and not read too much into it at this early stage.. We could find out it is just politics..
1) Can you imagine Telsa using Synthetic if all there competition is using natural at a much lower cost.. Not only would Tesla investors give them grief but they would find themselves very uncompetitive when one of the most expensive parts of the car is 30% more expensive then competition.
2) US sourcing.. Nice patriotic stuff. But reality is if Panasonic or another is half owner, I am sure they might have something to say here. Also this is one car manufacturer. And there logic looks floored. So let’s see what the reality looks like.
3) I would presume Tesla says they prefer Synthetic over Natural because for them Synthetic would be more consistent today. But remember they want Panasonic in because Panasonic are the battery experts not Telsa...
4) From Telsa website “Tesla starts with thousands of best-in-class Lithium-ion cells and assembles them into a liquid-cooled battery pack, wrapped in a strong metal enclosure.” So they talk about sourcing graphite in their announcement but don’t actually source it... They are buying ready made cells and basically doing the final packaging... Interesting contradiction.
3) The whole Tesla/Panasonic thing is not a certainty but the market is looking good. There was another article stating that Panasonic might not invest in this factory.. If your think Panasonic have the know-how on batteries (they bought Sanyo to get this) so Tesla are offering a channel and possibly a scale (Panasonic mentions they are concerned about the risk and investment needed). So the factory is far from guaranteed. However I think the demand for the batteries will be there because I think Tesla will do well and I know there is a big eCar (either hybrid or full) developing globally (China is where it is really looking interesting as a consumer)

Next,
I read an article that said natural graphite could actually be better then synthetic (trying to find it) if the contaminates are low.. It has something to do with the way the flakes are lined up (or not) in natural vs. synthetic. So LMB have already had a test done by an independent test house over a prolonged period (which also shows no major degradation over time which is great) showing an equivalent performance between synthetic and natural... They stated these tests are continuing which is great.

Thirdly, Cost of Product, Scoping Study and additional Capital Costs needed.
1) Pilot Production at McIntosh still slated in last presentation for end of year, early next year.. With this in mind, there must be things going on in LMB for them to state this is still on track. I would expect some more clarity on this in the coming weeks/month.
2) Capital Costs needed. I think it depends on the Hendga deal.. If the test of the sample is positive and they sign a firm off-take, one could assume their position in getting some funding other then equity (via a stock placement) would be good. Not saying it will go that way but a firm offtake would put them in a strong position to get funding.
3) Korea is another story.. This is earlier days but having done business in South Korea in the past, I am a big believer in being local will be a very positive influence here in getting an offtake. Additionally I suspect, Samsung will be a big customer here. Samsung are also talking to Tesla “The company's battery division has been in talks with Tesla Motors [NSDQ:TSLA] to supply lithium-ion cells, augmenting current supplier (and Tesla investor) Panasonic. Persistent demand for the Model S has caused Tesla to seek a second supplier.” (Source WSJ) I suspect LG are also looking at a lot here and then there is a huge assortment of Korean companies that supply this technology that we never hear much from (Just do a search for Korean Battery Manufacturers Lithium Ion). I strong believe mining in Korea will be lucrative because of the “business network”

I am looking forward to more clarity from the company on both the McIntosh Scoping Study and Korean next steps.

I hope this sheds some more light on the confusion and immaturity this market is still tackling.. It will be sometime and really only when production is ongoing and offtakes are being filled that we will see the whole topic settles down. This type of stock is not for the faint hearted. However, given the battery industry explosion (I have not even got into the whole Energy Storage story and where the industry see’s that going in terms of supplementing the current electricity grid), that graphene is showing so much promise and China (which has had a monopoly up until now) is starting to protect their remaining resources from exporting, the future of the graphite industry looks exciting.


Do your own research. This is my opinion and not investment advice. Information from various sources including WSJ, LMB presentations, Tesla website etc.