EGR (ASX) EGR vs Similar Companies

Originally posted by SugeKnight: ↑

Some info ive gathered from various threads / announcements and other research - it might help people assess EGR and the future from here.
Theres been many posters especially in the EGR thread, comparing RNU and EGR. So i thought i would compile my research and post into both companies threads for anyone interested.

Take into consideration that RNU: Siviour plays host to the largest reported graphite ore reserve outside of Africa and the second largest reserve in the world. That is kind of a big deal - So if everything goes to plan, in a few years time, this could be a really big graphite mining company. Just know that this will be a long term hold kind of investment moving forward (once the hype dies down - the SP wont keep trending up daily like now - it will take years for actual progress, plus dilution is required to succeed. Just look at EGR, the SP was hovering between 10c and 16c from the year 2016 to the year 2020).

RNU:
1. Only $4 Million cash on hand (Cash burn of AU$2.8m over the trailing twelve months in 2020)
2. No offtakes (contracts) but instead MOU's (non binding agreement with possible future binding contract) with Chinese anode makers (Jiangxi Zhengtuo New Energy Technology Co Ltd).
3. They need to raise US$150 Million* to fund / build their mine and SPG plant in SA *(please fact check this number - number taken from another poster)
4. Applications have now opened for grants to support manufacturing projects in critical mineral processing sectors. Renascors identification in the Road Map as a selected critial minerals project is NOT a commitment from the Government to provide funding nor an indication that any grant application would ultimately be successful. Note that in 2017 RNU was awarded 100K grant from the SA government.
5. Have yet to secure all environmental approvals - will be difficult to secure funding until they achieve the difficult stage 2 environmental approvals
6. Atleast 1 year away from Construction, and atleast 2 years away from Production

The Company’s indicative timeline targets:
Q1 2022 – Final Investment Decision.
Q2 2022 – Commencement of Construction.
Q3 2023 – Commencement of Production.

RNU's current Market Cap is now $266.5M (trading at 16c - about the same valuation as EGR right now).
EGR's current Market Cap is now $286.6M (trading at 63c).RNU is 12 months behind EGR (according to their own forecasting).
RNU will be further diluted to raise capital.
RNU production costs circa 30 percent higher per tonne for SPG - US$2,000/t (RNU) and US$1,531 (EGR) *(please fact check this)
RNU is purely a miner.
EGR has 3 business models - one of which is recycling / purification + (EcoGraf Graphite Manufacturing Australia), and also TanzGraphite (Epanko graphite mining project)
EGR already has over $55 million in the bank for commencement of phase 1 construction of the Australian (WA) Ecograf recycling plant (Construction phase 1 is to install an initial purified spherical graphite product capacity of 5,000 tonnes per annum. Construction phase 2 involves an expansion (possible gov funding) to achieve a spherical graphite product capacity of 20,000 tonnes per annum).

Why the recyclying / purification business of old lithium batteries (to recover battery graphite anode material) is a big deal?
There are 3 methods of recycling / purification currently used:
1. Hydroflouric Acid (toxic) - used by China
2. Chlorine (roasting)
3. Thermal (high temp)

All 3 methods are more expensive than EGR's patent pending 'EcoGraf' purification - not only that, EGR's method is green and clean. Something all governments and EV Manufacturers will be taking seriously.

Furthermore, we can recover graphite material from any supplier of old batteries etc - we can also license our purification technology to other companies (SungEel HiTech Korea)

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Back to RNU:

RNU: South Australia’s Minister for Energy and Mining granted a Mineral Lease for Siviour April 2019, the first step in the South Australian government’s two-stage assessment and approval process.

Siviour Battery Anode Material Project (Requirements / To Do List):
* Advancing to binding offtakes (from current 2 MOU's)
* Advancing product qualification tests with other potential offtakers and further offtake arrangements for remaining one-third of Stage 1 PSG production.
* Completion of technical studies to capture synergies of the integrated Battery Anode Material Project
* Final environmental and regulatory approvals.
* Lender due diligence and execution of a binding credit approved terms sheets (attempt to finance project once all the above is done)

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Back to EGR:

EGR: Announced preliminary graphite offtake deal with Thyssenkrupp in 2020. The German dealer has agreed to purchase 50% of EcoGrafs planned annual production and includes purified spherical graphite battery anode material and by-products.

Western Australia Kwinana plant said to be first of kind outside China.

(Thysssenkrupp Materials Trading is a subsidiary of the global Thyssenkrupp group which last financial year generated €42 billion (A$68.3 billion) in global sales).

EcoGraf received confirmation that two “leading” European industrial customers had agreed that its high purity graphite met their strict physical and chemical specifications. This followed an 18-month evaluation process and opened the way for the Australian company to enter sales deals.

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Ending thoughts:Both companies have great futures ahead. One is years ahead and de-risked than the other (EGR already secured funding / approvals / sales etc) for part of the business model, with the remaining parts of the business model pending / close (Epanko). Both are nearly valued the same (market cap), so either one is undervalued, or the other is overvalued - perhaps they are both undervalued.

I done the research personally as i was really interested in both companies fundamentals. I hope this helps anyone looking for some more info or comparing similar companies

Expand

Hi SugeKnight,

RNU's Market Cap is actually higher than EGR's when you take into consideration the 182mil 2c options. This adds $29mil to the MC of RNU,

Thank you for highlighting how overhyped RNU is with a fully diluted MC of $295mil, vs EGR who is much more advanced and has funding for Stage 1 production with an MC of only $286mil

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Last updated 12.28pm 03/05/2024 ?

EGR vs Similar Companies, page-8

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