Disappointing back to back ANN's, page-11

Hi, there is no conspiracy, bespoke electrical equipments (electrical boards and components) have to be designed, ordered, produced by the foreign supplier and then shipped and imported into madagascar. The cyclone delayed the shipment process for both electricals and the mining fleet (1 excavator + 1 wheel loader + 1 dump truck). Without the electrical equipment delivered and then installed by specialized electrical engineers the process plant cannot function and the team at gaphmada cannot recommission the mine.

If you read the first announcements and presentations from BSM management since the acquired the graphmada mine in july 2016, they have targeted april - may 2017 to finish refurbishment and start recommissioning the mine. This would happen in march-april 2018 : 11 months delay compared to initial targets.

You may consider an 11 months delay as incompetence, but you should keep in mind that :

1/ excessive delays are part of the mining industry so nothing out of the ordinary in the case of graphmada extensive refurbishment project ;

2/ the company had access to extremely limited financial resources which impacts its ability to execute quickly its plans ;

3/ the company is operating in Africa with poor infrastructure and limited access to capital goods and qualified labor added the associated challenges and risks of operating a business ;

4/ what matters is final results : could they achieve 6000tpa nameplate ? high recovery rates and therefore low costs per tonne ? high purity and recovery of high percentage of large flakes and thus premium pricing ? high profit margins and free cash flow ? could they succeed in expanding operations to 20.000tpa ? If they achieve all these goals in a reasonable timeline (by 2019), then we are looking at a massive re-rate of the stock price : basically at least 5x baggers from current levels (10c+ or 300M$+ market cap including expected dilution through exercise of options and not taking into consideration any lithium discovery). The stock market is a device to transfer money from the impatient to the patient, and IMO it cannot be more true for graphite investments on ASX than for BSM's case.

Happy multi-bagger graphite and lithium investment to all !