Hi AUchemist - some idle musings hoisted to be shot down.I...

Hi AUchemist - some idle musings hoisted to be shot down.

I suggest that it would be entirely predictable for the market caps of Renascor and International Graphite to converge, whether it be more due to RNU's market cap correcting down towards that of IG's or it be more due to IG's market cap rising towards Renascor's. A 10:1 difference in market cap is simply too obvious an arbitrage not to be played.

How China is dominating and manipulating the graphite market is exactly why there is such a thing as national lists of minerals that are considered critical and why such actions as the US Inflation Reduction Act are being undertaken by western countries to counter the manipulation. In light of the geopolitics involved, I'd wager that International Graphite will not be selling any product into China and if they sign offtake agreements with Japanese and Korean companies much of the product will be going into US and EU gigafactories run by those Japanese and Korean firms. I don't expect product from Collie will be in direct competition with Chinese product on price or customer.

From memory I think Andrew Worland said in one of his recent presentations that capex for the upstream development is about $90m and for the downstream build is about $200m. He also noted that due to government contributions IG has avoided going back to the money well since they IPOed early last year. I expect they are fully tuned into other ways governments are supporting industry and hopefully have been having early talks with Export Finance Australia about a favourable loan under the critical minerals initiative - this is the place that Renascor lined up an in-principle loan for $185m for their development costs. A debt package would be far better for existing shareholders than raising capital through issuing more shares and a loan organised through EFA would be far better than being screwed by the big offtakers.

AW said that their new custom-built ”qualification-scale” plant from the US is now on the dock at Fremantle and will be installed and commissioned ready to go operational by the end of the year. He also said that now they have an indicated resource they can start incorporating Springdale into the Collie battery anode material (BAM) scoping study that they released in April but which was based on imported third party feedstock. He did not give a timeframe for that exercise to be completed and the results released. Be interested to hear what other reportable milestones are coming up for IG.

A final observation: IG need to sort out the issues with Comet Resources which owns 20% of IG's share register (which is locked away until early next year under escrow - I guess the ASX imposed a 24 month block from IPO on Comet selling off its IG6 shares). The first point is that if IG does do a cap raise they know that 20% of issued shares held by Comet will be unable to contribute given Comet's dire predicament. The second point is that buying Comet and therefore picking up an instant holding of 20% of IG may become viable for a predator were IG6 share price to go on any sort of run. Of course Comet's shareholders will be hoping that nothing happens until their cache of IG6 shares come out of escrow and can be sold at market price. And IG will be hoping that anyone who pulls that manoeuvre is friendly. Anyway, it's already a mess and has the potential to become an even bigger mess so better to sort it now.