bottomed out - only way is up, page-44

Here is an excellent quote from "Reality in the Battery Space".

"Mr. Dinwoodie also points out that all graphite development companies are “flawed” in his opinion, in that their business models are predicated on producing massive, unsellable quantities of graphite concentrate at completely unrealistic selling prices. “Numerous companies in the graphite space have Preliminary Economic Assessments (PEAs) and/or Feasibility Studies which assume a US$1,400 to $2,000 per tonne selling price for graphite concentrate, utilizing 60-month historic average pricing (in order to capture the price spike of 2012). The current price for concentrate is closer to US$800 to $850 per tonne, which makes a massive difference to the actual economic viability of most graphite projects. What is even more unrealistic than selling prices,” according to Dinwoodie, “is stated production targets — normally in the tens upon tens of thousands of metric tonnes per annum — graphite companies use in their technical reports. Do any of these companies’ CEOs truly believe they can place 50,000 tonnes of concentrate in a market that globally is estimated at 375,000 tonnes? And, even if that was possible, what would that do to concentrate prices?”

“One need not wonder why there has not been one legitimate offtake agreement — meaning, a legally binding, take-or-pay supply agreement with a non-pre-revenue arm’s-length entity — executed in the junior graphite space and, further, why not one of the many graphite companies with a completed Feasibility Study has received CAPEX financing (except for ASX-listed Syrah Resources Limited, which curiously parted ways with its Managing Director last October). With no offtake agreements and no project financing, the market has spoken loud and clear… the current business model of all graphite development companies is fundamentally broken. And, quite frankly, any need for rest-of-world supply outside of China will be (easily) managed by Syrah Resources, the world’s largest and lowest-cost producer of graphite concentrate, when it commences production in 2017. The race to cross the finish line for emerging graphite concentrate producers worldwide is over. It’s done.”

http://business.financialpost.com/n...alabama-graphite-reality-in-the-battery-space