It reflected my basic attitude to TON in the Graphite Sector,dog59 with it's world class claims being based on Volume instead of Quality,
To me TON is only proving up that the whole of East Africa Mozambique and Tanzania and Malawi[?]and the off shore islands all of them are lousy with Graphite. In last 2/3 years this area has what?tripled/quadrupled the known global graphite reserves/? Broken any thought that China was depleting theirs and we were heading for a shortage considering the new graphite applications coming on stream.
dog59 drill result price spikes are sooo last year. The move now is actual or near term production. MOU's aren't doing it. Offtakes give some impetus especially combined with refurbishing existing plant but other than a flurry of day trading in some $5mil Market Cap at under 5 or 10 cents coming out with some "exceptional' drill results? Market yawns even does it to those 5 centers usually.
My angle is that there needs to be actual production coming out of East Africa, TONners are obsessed with equaling and exceeding SYR and well SYR isn't moving ahead very much in actually going into production,is it? Not verifying that a 200kt annual production is actually viable/doable.
You know dog59 that the Biggest Chinese Operation only does some 80kt/year?
Anyway you have read that article about the best graphite stocks to invest in criteria? It was by some Ashbury Honcho with Ashbury being a big graphite producer and trader in the US and Europe.
Anyway one criteria was the break up of flake sizes in a deposit.One wanted high Large Flake predominating say 50% Large/Jumbo was excellent. TON could probably maybe have that hey? Tick the Box whacko.
BUT BUT one has to consider and know it's amorphous/fine flake component to calculate how many tonnes of this will come out with the 'good stuff'.
because if you are producing 200kt/year thus pulling 100kt good and say medium flake also ran 40kt and 60kt amorphous/fine 'junk'
well that 60kt junk is in your costs of production but the projection is that is unsaleable,certainly not in 60kt/year lots.
Do you follow,dog59? 30% of your costs can not find a market.
Now we don't know the actual flake distribution of TON. We are just fed the "good news" of visual large flake is observed in every dang hole and the mettallurgy is on the way soon but dog59 it is inevitable that the above distribution rates 50/30/20 are 'optimistic' perhaps but still illustrate the problem for Super Pits 200kts/year producers.They are churning out too many tonnes of unwanted unsaleable product.
but SYR says it's gunner and so should we I hear you say?
Others have the same break down of flake percentage and are going into production,you figure?
Consider this- SYR MOU'd for 100kt of flake at $1000/tonne. Not Big/Jumbo specified only just Flake jumbo/big/medium/fine are all flake sizes so according to the MOU the Chinese were taking the lot?
Setting aside that this MOU hasn't been ratified,is very overdue in being off take converted one can also ponder that the 'problem' is that the Chinese/ Euro guy do only want the upper grade gear[ like the UNX Mou]
200kt of it but to supply that say 60% 200kt there will needed to be produced 333kt to leave 133kt of fine/amorphous.
See the Super Pit high production=low cost= competitive sale pricing has a problem in they're super producing to the already swamped amorphous/fine market?
whereas the Boutiques under 50kt 10kteven are aiming to produce provide high grade/higher value[than $1grand/tonne for bulk] and thus have very little of 'junk' in oversupply to feed into market.
IMO TON is in excess of the Graphite Sector Market Cap average as is SYR. Further I don't think that Size of Deposit is a 'valid' criteria for explanation of this. I reckon that a resurgence of the steel industry globally may absorb the Boutique's new junk output but the Super Pits?Amorphous is I think 400kt Globally now Traditional at $400/tonne and falling.
ohh you do the maths and try and contemplate Big might not be best let alone Enormous or Exceptional
just like BB in a mirror,hey dog59.
TON Price at posting:
35.0¢ Sentiment: None Disclosure: Not Held
