Could be, barney, though I note they are raising $4m not the $5m...

Could be, barney, though I note they are raising $4m not the $5m that was being talked about and also that Andrew Worland acknowledged in the announcement "the continued support of our founder and Chairman Phil Hearse for his commitmentto the Placement". A fair guess is that not all of the $3m placement money came from outside institutions and sophisticated investors. To me, that does suggest there was only luke warm outside interest in the placement, even at 12.5 cents. So it might have been a combination of reasons why now and why for only 12.5 cents.

As an aside, the annual report showed that Phil Hearse held at the end of June last year 17.4m shares (heads) and 2.4m oppies and that there are 166m IG6 shares on issue. So PH already holds around 10.5% of the share register and presumably put his hand up for another bunch of shares in the placement. We will find out when he declares his change in ownership to the market but it does seem that International Graphite is Mr Hearse's conviction play.

My punt is that if everything falls into place over the next 6 months or so International Graphite will be rerated, and in 20 20 hindsight IG6 shares at 12.5 cents a pop would reasonably likely be seen as a screaming bargain. I think there is a lot going in the company's favour here but the market is simply unwilling to buy the story, to lay the bet, to back the analysis.

At the moment there is lots of push-back from economists and others to Albo's Future Made in Australia paradigm shift (where the government actually backs start-up businesses and sectors). Their dogmatic view is that if governments subsidise and bail out private sector entities those entities will inevitably become rent seekers and always be uncompetitive, thereby harming the overall economy.

If I were Albo's minders I would put forward this company as a prime example of when government support can be a positive. Currently global processed graphite production is dominated by the one unreliable source, China, and there is no production of graphite where the supply lines are fully secured. Australia actually has several possible projects to break that monopoly but all are struggling to obtain market support. This particular project has an award winning source of graphite material and is run by a team who has expertise in down-stream processing of graphite. As far as I can see the financial metrics of the company's operations at Springvale and Collie make sense but the brutal truth is that market is simply unwilling to back the prospect. It is obvious to me that the government (state or federal, coalition or labor) has every right to step in to carry projects of critical strategic importance such as this project through the bad times every miner experiences in their development phase. In mining this period when the market tends to desert new mining ventures is referred to as the Lassonde Curve (in medtech that interim unwillingness of the market to invest during the development phase is called the valley of death - exactly the same issue in that the market stops functioning).