Surprised how quiet the commentary has been on the Quarterly. I've read through it a couple of times but due to being in transit overseas didn't have any time to put some thoughts down. Overall, the look and feel has improved, as has the content, which includes a clear view of what shareholders should expect over the next half. PC's direct and outcome focused style (with actual outcomes delivered) is working well for me.
A few thoughts on the various updates:
Corporate
- $2.39m expenditure for the quarter with $2.97m cash on hand
- Good that costs continue to be reviewed and minimized with Admin & Corporate costs a key focus area!
- Expenditure should reduce next quarter now that additional director fees aren't being squandered
- Costs largely in line with previous quarterly, with key expenditure items in Bunyu PFS ($587k) and ZG working capital ($880k) to be expected.
- No major surprises for me
Shareholders need to start seeing updates on Sales + Revenues from ZG. The plan to make ZG cashflow neutral in FY24 is good, and probably under the assumption it's operating in war conditions. Should the situation in Ukraine change (i.e. war ends) it could quickly become cashflow positive
Most small caps have been rattling the tin for capital raises recently. Volt forecasting another 1.97 quarters of funding until next raise. This is OK but like most will need to be positioning for funding within the next 4-6 months. Hopefully after some substantial value adding outcomes first.
Wildcards - will we see any of the following?
- Capital Investments from finance partners
- New grants won
- Additional cash added to balance sheet through divestment of Gold assets
Bunyu- Updated PFS coming this month, with improved project economics from 2018 study which had an EBITDA of US 93.6M, Pre-tax NPV10 of US$18.6M and IRR of 21%
- Financing discussions with multiple parties, including a well established natural flake graphite user visiting the site this month. Interesting!
- A clear plan with milestones for the next 6 months
- The office & storage facility is positive, adds local presence/acceptance, brand establishment.
- Getting Bunyu funding this upcoming quarter is key
Zavalievsky Graphite- 2nd Production campaign commencing from this month with a calendar year production target of 3000tonnes (~U$3m in saleable product).
- Would like to see sales reported transparently. How much/ how many customers?
- Plans to monetise Garnet by product - discussions with potential customers
- Recognition of strategic European asset by EIT and ERMA open "is expected to open new business development opportunities for Volt in Europe."
- Plan to make ZG cash flow neutral in FY 2024
I particularly liked this statement:
"ZG is a proven asset and produced about 60,000 tonnes per annum of graphite in the 1980s. We believe that ZG can meet a significant portion of Europe’s future graphite needs."Gold Assets - Divestment of 3 assets in Guinea. Either they are sold off for $$ or spun out into separate entity which could be a bonus for SH if there's an in-specie distribution.
Lithium- Serbia / Rio Tinto progress on the Jadar Lithium project will set the tone for all other projects in the country.
- Not much will happen until the way forward in Serbia becomes clear with respect to their mining policy for Lithium, but IMO it's just matter of time before the country decides to monetize their highly valuable natural resources.
- Volt's Jadar North project could be HUGE. It was actually pegged by the brother of Rio Tinto's geologist Jovin Grubin in 2010, vended into Asena Investments and picked by Volt in 2020 through a transaction in exchange for Volt shares. Interestingly, the director of Asena is none other than Rohan Patnaik, who is also director of LIN alongside Asimwe. LIN has 13-bagged from 3.5c to 45c in a 12 month period and looks to continue to get better.
https://balkaninsight.com/2022/04/13/its-not-over-the-past-and-present-of-lithium-mining-in-serbia/
Customer Development- Two new customers started evaluation of Volt's graphite.
1/ A large
global battery producer with 30GwH capacity
2/ A
NASDAQ listed US headquartered battery producer
This could get very interesting as they both sound like heavyweights in the battery space.
Lastly, as I read through the report I found it refreshing that PC addresses shareholders with reference to "Your Company" and continues to highlight his focus on maintaining fiscal discipline. He's very clear on where Volt is focused and where it is not. Importantly, he's been with the company for 7 months and has delivered to all of his commitments (with Bunyu finance the only exception/date change).
Sorry - a bit of a long one this time.
GLTAH
(20min delay)