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clock Created with Sketch. 31/07/20
13:27
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Originally posted by DoctorFouad:
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@balexy The mining equipment, processing plant and graphite resources underground have IN THE PRESENT ZERO value if you cant sell the graphite at a profit. They may have a value IN THE FUTURE, but that is the issue, no one knows when this future will materialize (in 1 year ? 2 years ? 3 years ?...), when exactly the small flakes graphite prices will increase to 600+ us$ per tonne to become profitable for Syrah to mine, process and sell ? No one knows. Assuming Syrah runs out of money and cant raise capital due to low graphite prices, believe me the value of the mine and resources will be peanuts if sold in auctions.
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Valuation for SYR is actually easier than you think. You just need to find the NPV of a similar project. We already have one in the recent investment in Mongolia. A 100kt per year mine with an initial investment of $630 million USD. Therefore fair value would be $630 million USD at minimum. Of course you could argue that of the 100kt they predict 40% large flake or 40kt large flake per year. However SYR at full volume would produce similar amounts of large flake. Also Mongolia is frozen over 30% of the year.https://www.mining.com/inner-mongolia-new-graphite-mine-may-help-china-fill-gap-from-lower-imports-report/
(20min delay)