Syrah is already very cheap even on CnM. 40c would give it an...

Syrah is already very cheap even on CnM. 40c would give it an enterprise value close to WKT's but with $100m cash compared with WKT's $4m. The BAM operation alone will be worth $400m at least.

One thing is for sure they need to cut non operational staff costs by 60%. Get rid of the fat. The CEO should have been cutting a long time ago and the CFO advising him to do so.

Most likely scenario is they back off production to meet the better priced Gredmann contracts at 108ktpa. Note they had ramp up recoveries of about 70% at that level and given recovery improvements / tweaking they will easily get this to 85%+ and also increase coarse %. On top of this they could probably sell another 40kt pa at improved prices. So circa 150 ktpa.

After the cuts the fines price will go through the roof as China is currently a net importer (150ktpa ?) and growing rapidly and soon will be scratching around to find...

1. quality (low impurities)
2. consistent supply
and 3. grade (which translates to better battery anodes and recovery).

The battery supply chain wants these 3 things, not random supply and grade from a conglomerate of small globally scattered operations.

The market has now had a taste of the better product so its time to pay up if they want it imo...short term pain for long term gain.