Interesting to note that the other graphite company to come to the production stage recently, namely Flinders resources, has not been able to ramp up to full production, because it cannot sell that volume of product. Basically they produce mineral to sell when they see the market for it and that is what VXL are doing. The problem is compounded for VXL because current production of high percentage fines is not very marketable and at the cost of production cited in the FS is hardly profitable. This is why the company is rapidly gearing up to a program of advanced manufacturing shifting the emphasis from bulk tonnages to value added product lines and increased margins. That's all well and good and in the longer term is likely to to pay off, especially if it can process and sell the high value Arterial Flake. But in the meantime the company will not be profitable, just as Flinders is still not profitable. As with Flinders we should expect quite a long period before profitability can be expected and there are negative implications for that in terms of the company's liquidity. I would think that this lack of near term profitability explains the weak share price recently.
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