It is a very good presentation and extremely easy to read in entirety. I’ll try to cover a few points that seem new, interesting or relevant to recent discussions but really, reading the whole presentation should be quite easy work.
1) Today’s share price movement
Before I start, just a small note on today’s share price movement
https://au.finance.yahoo.com/echarts?s=ton.ax
We started with a quick fall by 10:13 am and volume already seemed to be more than a million. This could very well have been
stop losses being triggered as TON moved out of the bottom part of the 22.5 to 32.5 c range.
It is possible that some
traders were spooked because we do see some
medium volume bars in the next 2 hours, which is understandable. Again, quite a bit of it was at 21.5 or 22 - no real capitulation really
One of the biggest volume bars was then at
13:13 of around 300 K taking the share price up to 22.5. So this is actually good Imo as one of the bigger volume bars of the day was an upwards move and it was buying.
Price recovered by end of day to close at 22 c – just half cent fall from yesterday. Hardly fear inspiring
Total volume for the day was still just 3.2 million – more than usual but not a capitulation by any means when considering above points. Like I’ve always said –
investors just aren’t selling. Hopefully, we got some new investors on board today. The problem with a share price in the 20s is just a few cents here and there could give a very distorted picture of what is happening. Anyway, enough of price movement analysis from me and I’ll move on to what I know best.
2) Market cap – Pg 2 of presentation
Very low market cap of $84 million. Add in dilution of approx. 10% for options and performance rights and we get
diluted market cap of some $ 92 million. I recently calculated diluted market caps of 2 peers - one was some $250 million and the other was between $600-700 million. For me, this is the one of the most important points because
not only IMO does TON have the best fundamentals but is also the cheapest by a mile
3) Directors and Top 20 shareholders - Pg 2
Directors hold 11% and top 20 shareholders hold 42%. Also
@jackarooz has been checking the top 20 list regularly and the list has been pretty stable. Investors just aren’t selling, and TON is pretty closely held. Hopefully, we'll get some new investors in the 20s
4)
YXGC JV – Pg 5
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Total investment US$10M (49% contribution by Triton)
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Project Construction Duration:9 months
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Production Rate:Initial development of 10,000 ton production
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Annual Revenue:Initially estimated US$25M
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Graphite: Sourced locally for 2/3 years, long term supply requires TMG
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Fast Track to Revenue: Revenue Q3, 2016
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Staged production growth (up to 100,000tpa estimated cash flow US$250M per annum)
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Minimal capex requirements (US$5M)
My comments – Good snapshot overall. I highlighted some key points that I thought important.
From the above, we see that TON and YXGC seem determined to get the project off the ground, starting small initially and eventually growing in the coming years.
Capex is low and construction is quick.
This will give TON some initial revenue stream in 2016. TON has also show benefits to YXGC by aligning with TON thanks to TON’s excellent resource
5) Ancuabe project – Pg 6
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Strategic Alliance:Triton and AMG Mining (GK) (subject to advancing current relationship)
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Total investment US$10M
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Production Rate:Initial 10,000 –20,000 tonnes (ability to scale up on demand)
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Established Infrastructure: Graphite concentrate plant, sealed roads, grid power, direct access to Port of Pemba, logistics, global client base, extraction expertise
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Annual Revenue: Initially estimated US$20M -$40M
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Fast Track to Revenue: Revenue Q2, 2016
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Staged production growth (up to 100,000tpaestimated cash flow US$200Mper annum)
My comments – Once more, just like the China JV, we see that TON aims to get this off the ground next year to give an early revenue stream, starting off small and then aiming for more production growth in following years.
TON benefits from the alliance and established infrastructure
Lots of benefits have been mentioned for AMG too, and main benefit is again our great resource.
6) Nicanda project – Pg 7
- Project Investment:Total investment US$80M
- Project Construction Duration:16 months
- Annual Sales: Initially estimated US$120M
- Mid Term Revenue Stream: Revenue Q4, 2017
My comments - Our main project. No major surprises here. Obviously, funding will have to be secured for this later on, somewhere in 2016
7) Mozambique JV – Pg 8
-Project Investment:Total investment estimated US$15M (70% contribution by Triton)
-Project Construction Duration:12 months
-Production Rate:Initial development of 10,000 ton production
-Annual Revenue:Initially estimated US$25M
-Longer Term Revenue Stream: Revenue Q4, 2018
-Staged production growth (up to 50,000tpaestimated cash flow US$125M per annum)
My comments- Obviously a longer term project as indicated and would be done later on after the other projects take off
8) News flow –Pg 13
I’ve just arranged it date wise (as against project wise) for my reference. Just mentioning it here in case anyone would like to have a look
News flow Q4-2015 (this quarter)
YXGC JV (China) - Commence construction enhanced graphite factory -Q4 2015
Ancuabe T12 - Drilling activities update –Q4 2015
Ancuabe T12 - Mineral Resource -Q4 2015
Nicanda hill P66 - Drilling activities update –Q4 2015
Nicanda hill P66 - Mineral Resource -Q4 2015
Nicanda hill 100 - Resource re-classification -Q4 2015
Nicanda hill 100 - Reserves targeted for -Q4 2015
My comments – Still lots of great news this quarter including our jumbo flake Ancuabe T12 and Nicanda P66 resources.
9) New flow - Q1-2016
Ancuabe T12 - EIA & DUAT update –Q1 2016
Ancuabe T12 - Advancement of strategic alliance with GK –Q1 2016
Nicanda hill 100 - Early works and access update –Q1 2016
My comments – It clearly seems that AMG is waiting for Ancuabe resource to advance strategic alliance
10) New flow - Q2-2016
Ancuabe T12 - Mineral Reserves -Q2 2016
Nicanda hill P66 - Mineral Reserves-Q2 2016
Nicanda hill 100 - EIA, DUAT, Mining License update –Q2 2016
Nicanda hill 100 - Expanded DFS due for completion by -Q2 2016
My comments – We have been discussing recently as to when DFS would be completed and we might have gotten our answer. There are obviously pros and cons and I guess company thought it makes sense to have an iron clad DFS. The company's approach might be the right one as once the DFS is over, our scope for getting finance is much more, and we become significantly derisked. As many long termers have mentioned, there is no point in taking short cuts and regretting later on.
11) New flow - Q32016
YXGC JV (China) - Commission factory –Q3 2016
YXGC JV (China) - Full production 10,000tpa -Q3 2016
My comments – TON clearly aims at some early revenue next year. What is interesting is that this would give us some funding.
12) Conclusion
I’ve cut down a lot on the points this time because a lot of stuff has been discussed by us and also because the presentation has been beautifully prepared and is so easy to understand, that I could not possibly simplify it any more. Great to have a quick read of the entire presentation.
(20min delay)