New Stratmin boss going for growth
By Robert Tyerman | Thursday 28 May
Brett Boynton, the corporate financier chosen to head ambitious graphite play Stratmin Global Resources (STGR) has pleased investors in this recently lacklustre AIM performer by committing himself to a cost-cutting expansion drive to double projected output from the company’s flagship Lohorano project in Madagascar within two years, while seeking out deal opportunities to expand the company further.
Shares in London-registered Stratmin have perked up from a March low of 4.13p to 5.38p, against a 12-month high of 9.75p and a mere fraction of earlier levels, as Boynton declares he is confident of seeing production hoisted from a currently-targeted 6,000 tonnes a year in Stage 1 of the company’s plan to an annual 12,000 tonnes.
Graphite, a versatile material whose applications include lithium batteries, electronic vehicles, mobile electronics, solar power cells and brake linings, though brittle itself is also source of graphene, tomorrow’s ‘wonder material’, hailed by some as ‘the strongest and most conductive material ever measured.’ Now valued at £6.8 million with backers including Singapore-based Consolidated Resources and Viking Investments of the USA, Stratmin, which clinched a key off-take deal last autumn with a major unnamed US customer and has recently achieved a 94.3% carbon grade in production, has not managed to make money out of it yet, losing a little-changed £2.4 million last year.
But that is changing, says Boynton, who comes from a Zimbabwean and South African mining background and played key roles in establishing Australian resource concerns such as Signature Gold and Tellus Holdings before taking over the Stratmin helm from entrepreneurial Manoli Yannaghas. He indicates Stratmin expects earnings of $2.5 (£1.63 million) to $3 million before tax, amortisation and depreciation from Stage 1 at Lohorano, which so far boasts nearly 235,000 tonnes of contained graphite, measured and indicated, with grades of 5.15% and 4.04% respectively.
According to Boynton, ‘that will not in itself be a company maker,’ and he argues ‘we shall need to explore and expand the tenements there to expand the resource and obtain finance for a larger plant.’ Madagascar has experienced previous political upheavals, but its geology provides a soft-rock, clay environment, which he argues should help Stratmin cut production costs from $500 to $700 a tonne now to ‘between $300 and $350 a tonne’, against target contract sale prices of $1,000 a tonne or more.
Boasting of the technical team of exploration geologists, process engineers and sales experts he has built in Sydney, Boynton suggests he can help Stratmin turn itself into the platform ‘for a much bigger operation’. Citing keen interest in graphite from Australian and other investors, he says ‘we are keen to attract specialist resource investors, so that, when opportunities for corporate deals come up, we can take them.
‘All the pieces are there,’ declares Boynton.
The shares, despite the obvious risks, offer speculative potential.
