basic comparison between mgy and syr - mgy 60c

The Green Giant project in Madagascar is rapidly shaping up to be better than SYR's projects in Mozambique and Tanzania.

I quote the following

"The deposit so big, that a mine will have a zero strip ratio for at least the first 100 to 150 meters of depth and 10 or 20 years of mining. The near zero strip ratio at Molo for the early years will have a huge impact on keeping mining costs low. The only rock the company will ever move is ore. That is a lot of fuel savings when compared to accompany with a 4:1 or 5:1 strip ratio. There is no other graphite deposit in the world currently being explored today with the dimensions and grade of Energizer’s Molo deposit.

Undeniably Molo has best metrics of any graphite deposit in the world."


If you havent read it already, the following report is excellent:

http://us2.campaign-archive1.com/?u=6aec09ee2c6c558d6b5867e62&id=638b186447&e=c39b6d64b8

If we say for argument sake that the projects have equal value, and if the market is ascribing $300m to SYR's 100% share, then MGY very simply has an implied value of $100m or 60c per share. MGY has a combined stake of 30% in Green Giant (including its 7.5m shares in Energizer), but unlike SYR, doesnt have to spend a cent because it is free carried to BFS.

MGY doesnt need to raise money, it has royalty income from quarrying and rental income from the office property it owns in Madagascar, plus $5 million in cash and securities.

As long as the market is valuing SYR at $300m, MGY represents one of those rare and beautiful under-valuation anomalies which always get resolved in time. Either SYR will fall or MGY will rise or some combination of the two. Or maybe they'll both go up!

G'luck