G'day Hotchoc,
I have found the commentary on Social Media pumping up International Graphite to be a source of humour to be honest. Whilst I expect certain Piggy Backing FinTwits to make a comparison of RNU vs IG6, I didn't expect to hear it from the MD Mr Hearse in the West Australian. At the end of the day RNU hasn't commenced construction, are we really the Benchmark of the industry already ?
I must admit over the past ~2 years I have noticed Social Media is having an ever growing impact on the stock market. A number of individuals I personally know and many others I see online are making serious coin in what I termed "Piggy Backing" above. For example, If a Company such as CXO in the lithium space signs an offtake with a Tier 1 Partner like Tesla or if they announce some pretty amazing drill results, these "Piggy Backing" individuals will find every Lithium stock on the ASX trading at under 50m and will pump the absolute shite out of them, saying crazy things like "Look these guys are 50kms away from CXO, they are next to run". When the reality is they are a piece of garbage that will no doubt fall within the 98% of Mining Stocks that never make it to production.
I could write you a list of +20 Individuals on Social Media engaging in such behaviour, who are making serious bank and then moving onto to the next pump. But I'll save that for another day !
To answer your question, yes I have been following International Graphite over the past 2 years. For those who may not be aware, International Graphite have a well credentialled management team. They also IMO have a well experienced technical team with significant chemical engineering / processing capabilities.
The business model of the company back in 2019 / 2020 was very similar to that of another Graphite Company in Western Australia. International Graphite planned to acquire graphite flake from 3rd parties overseas, transport that flake to WA and convert it into higher value products. The company completed their Definitive Feasibility Study in 2020 and looked set to head off down that path of processing.
Since 2020, the company had a lightbulb moment and has sinced pivoted and changed paths.
It no longer intends to acquire flake feedstock from 3rd parties as that business model just doesn't stack up financially or allow the company to compete with other fully integrated in country players like RNU, TLG or others in China.
In 2021, the company set out with the intention of partnering with an existing Graphite Player in Australia that could provide feedstock to its processing plant in Collie, WA. Western Australia although rich in many mineral deposits does not have any Tier 1 Graphite Deposits. I would almost go as far as saying WA does not have any Tier 2 Graphite Deposits either.
The company settled on partnering with Comet resources and hence today we now have IG6, the fully integrated Graphite Business.
Whilst RNU and IG6 share similarities with both planning to enter the graphite space and both being fully integrated, it is like comparing a Ferrari with a Kia to be honest. I respect and acknowledge the downstream processing capabilities of IG6, but the Springdale Deposit is a 3/10 in my book, whilst Siviour is a solid 8.5/10 in my book.
In terms of IG6 and their trajectory, the company is about to set off on completing further drilling to hopefully result in indicated or measured resources that could form apart of a future feasibility study, then they would need to embark on the glorious path of receiving mining approval in what is a fun (not) regulatory framework in Western Australia. If all things go swimmingly and on schedule, the
best case scenario for IG6 would be to enter production in approximately 2028 (Best Case Scenario).
The deposit itself is nothing amazing. 3 separate mining zones / blocks that have been drilled to form a moderately small sized inferred resource to date. Additional drilling in the surrounding area has not resulted in anything remarkable to be honest that would have me interested in jumping on board.
As I mentioned above it is like comparing a Ferrari with a Kia, yeah they both have 4 wheels, play music, have seats and will get you from A to B. But in terms of which project is ~4 years further ahead, with a significantly superior resource, with geology that leads itself to having a much much lower unit cost of producing graphite concentrates.
I have my money invested in what I believe to be the #1 Graphite Play on the ASX (Renascor) and won't be jumping on the new flavor of the day, no matter how hard the influencers on social media "Piggy Back" off RNU
*PS if there are any Piggy Backers reading this who get offended, I don't dislike you personally, I dislike the game you play !
(20min delay)