BBR has projects with high quality resources and low risk profile (low capex and high margin...)
For graphite, there is no point to boast having huge resources tonnage with low/medium grade as these project could be at risk due to low margin and supply/demand of graphite market in medium/long term. There is no shortage of graphite... It's better to have project with a small but high quality of resources, with a strategy for graphene production in long term.....
"Companies that boast 80,000 ton-per-year production or high purity levels don't always impress Kiril Mugerman, mining analyst with Industrial Alliance Securities. Why? Because finding buyers for all those tons is a huge challenge, and thrifty end-users like to purify lower-grade graphite in-house."
As for BBR, broker has a price 6 month target of SP = $1.40
Price using following conservative production scenario of Matale project only : SP = $4.51 (fully diluted share)
- sale "coated spherical graphite ( @ A15,000/t)
- capex = A$25M
- LOM = 100,000t @ +90% C
Now IMO, SP will go much higher if we take into account:
1. Production of graphene where sale price could go up to $100,000/t
2. Production of Queens graphite mine, with potential of graphene oxide production facilities :
"...RSM converted graphite from the Queens Graphite Mine into graphene oxide, and
supplied samples of graphene oxide to end users in the battery, solar, high-end electronics and other industries.
...Graphene Batteries of Norway tested over 50 types of graphite from around the world, these
included amorphous, flake and spherical graphite. Results showed that the material which
yielded the best end performance was that from the RS Group.” Source: News release from
Graphene Batteries 30/09/2013, published by Industrial Minerals.
...Bora Bora Resources has agreed under the terms of the HOA to earn-in to RSM by funding the commercial development of the Queens Graphite Mine and scale up of graphene oxide production facilities to meet this demand.
....RS Mines is achieving prices for their value added natural graphite product at or above synthetic
graphite prices and materially higher prices for graphene oxide. RSM have supplied graphite and/or graphene oxide to clients including:
- A major supplier to the electronics industry with a market capitalisation in excess of US$2B;
- Norway’s Graphene Batteries;
- Various research institutes including Manchester University;
- Other customers can be viewed on the RSM website (www.graphite.com.co).
Based upon feedback from customers, RS Mines’ Sri Lankan graphite has superior electrical and conductivity properties when compared to flake graphite and synthetic graphite. Additionally,
RSM’s graphene oxide produced from high quality, ultra high grade natural crystalline vein graphite
has superior properties to other graphene products due to the vast improvement in the number of
defects in the graphene made from it. This feedback suggests that the vein graphite from the region
where Bora Bora Resources’ Matale/Kurunegala Project is situated potentially hosts highly strategic
graphene resources.
BBR Price at posting:
73.0¢ Sentiment: Buy Disclosure: Held
