FGR more than doubles the capacity of its graphene production...

FGR more than doubles the capacity of its graphene production Cell

Last week First Graphite announced the continuing optimisation of its Graphene Cell, increasing capacity by 150%. Significantly, the cell will be able to produce 10-15 tonnes p.a. of graphene for a capital cost of less than $50,000. At recently quoted graphene prices of more than US$100,000 per tonne, there is potential for each unit to generate net revenue of A$2m p.a.

Rather than build a centralised treatment plant that might cost $30-40m to establish capacity of 2,000 tpa of graphene (the level that Talga talks about in its now dated scoping study), FGR could construct 200 of these cells for less than $10m to achieve the same production rate. However, it doesn’t have to do this all at once. It can do it incrementally, as and when the demand for the graphene warrants it. It doesn’t have to take on the financing risk ahead of having firm sales contracts. It can grow in tandem with the market, minimising dilution and risk. It doesn’t require or rely on economies of scale as the process is modular.

The important point is that FGR has production capability today, right now. It is the only ASX-listed company that can do it. It has granted mining leases and it has started production of graphite, the essential feedstock. It is actually ahead of everyone else in the game, as far as ASX-listed companies are concerned.

http://www.fareastcapital.com.au/imagesDB/newsletter/WeeklyComm13May2017.pdf