KNL Strategy ticking all the FA boxes, page-5

Broad brush and sweeping generalisation ... possibly, if only someone would be able to provide evidence that I'm wrong. I would only ask for a single chinese deal that has been taken to it's full conclusion without changing the goalposts .. to be brought to my attention. As it stands, Chinese deals have either fallen over, been negatively changed (negative relative to the graphite company involved), or are still "on foot", but none have completed. I don't believe a single Chinese partner has put any hard cash into an ASX graphite company (or TSX, for that matter), but they certainly expect it the other way (LMB, and TON). Is it a broad brush or generalisation when you are more likely to be right than wrong? Possibly, but that doesn't mean it shouldn't be said.

"Does that imply that you think KNL management are incompetent and/or fraudulent ?"

Not at all, Hatmophit, and I'm glad you asked. Thank you.

Our management has made it pretty clear in numerous presentations that to be primarily reliant upon a battery processing facility would mean we'd never get into production. They have had meetings with graphite users in the battery space, particularly in Korea and Japan, and know that there is an opportunity to supply graphite once we are in production, but not via committed off-takes, and not in any great quantity. As I have posted over the years, and management has put out as part of their strategy, a graphite mine will only get built with western financiers if they have genuine, current industrial users of graphite committed onto binding agreements. SYR didn't fit this bill, couldn't evidence genuine binding buyers, and hence had to raise 100% equity to build a mine.

With regards to 3D printing, management have indicated that they are keeping their options open by having a foot in the door, but that this is not a key area for the business, with an even lower chance of immediate success than battery processing. It's an option they are keeping on the table, but not one that is having any serious attention (or money) being thrown at it.

Our management have been crystal clear since the day Andrew Spinks and Assoc joined, for a new graphite mine to have any chance of success, it's metrics had to stack on current industrial users, with current industrial demand, with current prices. It helped enormously that they had John Park on the board prior to his unfortunate death, one of the few non-Chinese with genuine experience in running an actual graphite mine (in Tanzania). They also knew that to have any chance of funding success, they needed genuine buyers that a bank could bank on. Everything else (batteries, graphene, 3D printing, etc) is a bonus if it comes off, but it isn't what we are relying upon. Our BFS for bank funding is on Epanko only as an industrial mine. Contrast that with MacBanks valuation of SYR as less than $3 if there is no battery processing plant (which is below the current share price), and you can see an example of a company almost wholly reliant on a yet unproven business model to reach it's valuation target.

PS I don't disagree that IF a super-pit was in production, their economies of scale are better. My comments are saying that the "IF" is too big a risk. There are no genuine, bankable buyers of that size in the current graphite market. The existing agreements may still be genuine, but it's a big risk to take. And as NOT (TON) is showing, their strategy is suddenly to become smaller. SYR will start production smaller. VXL had to scale down even smaller than the small amount they started with, due to lack of sales. And MNS will likely start smaller too. As I have stated, MNS have a good deposit in Tanzania. But to pretend that they are going to flick a switch and suddenly be producing 20% of the global graphite trade is fanciful.

PPS I never lie to the man in the mirror.