ASX Graphene Exposure - FGR

STTCOMP FGR, FA Long

First Graphite Limited
Shares on issue : 279M
Market cap : $28M
Cash : $1.51M (31/03/2016)
Forecasted expenditure Q4: $600K


BULLISH ON GRAPHENE

From a global macro economic perspective, graphite will make a come back late in 2016 with further steam into 2017. Current indications point in this direction with the graphite benchmarks, SYR and MNS pointing in the right direction. Add to this the new hot sector to be "Graphene", a next generation material that commands $50,000/t - $100,000/t (synthetic).

Leading the charge is Warwick Grigor a world renowned mining analyst and investor, chairing First Graphite. What's unique about First Graphite is that the company has exposure to Sri Lankan Vein Graphite (the most purest forms of graphite with >95% carbon) and Graphene (relationship with the University of Adelaide)

FGR is transitioning to mining and has received all approved mining permits to produce direct shipping graphite ore. Please refer to pictures below for state for current state of play.

There are not many stocks on the ASX with graphene exposure. This is what got me excited. The University of Adelaide has succesfully piloted asmall scale exfoliation process to produce Graphene with exceptional quality. Currently they are scaling up to commercial volume. FGR claims a ~$50,000k margin as compared synthetic graphene. The process is very simple, cheap and does not require hazardous chemicals or energy requirements. The key differentiator here is that the source vein graphite is an ideal source for storage batteries and graphene due to its high carbon content and low impurities.

Technically last friday FGR started its new breakout on volume. There are significant price catalysts in the pipeline which would warrant close attention:

+ First production of direct shipping ore which commands higher premiums than coarse flake graphite.
+ Vein graphite offtakes/agreements
+ Discovery of a large 1.72m vein which could be a company maker.
+ Stable mining jurisdiction. (ie MNS)
+ Commercial scaling up of results of Graphene from the University of Adelaide.
+ Currently samples of FGRs graphene is being tested by industrial end users. Offtakes.
+ Exposure to the electrification/battery/storage supercycle.