Graphex Mining (ASX:GPX) has announced a resource upgrade at their Chilalo Graphite Project in Tanzania. Highlights of the upgrade include:
- High-grade resource – increased 80% to 16.9Mt grading 10.2% (TGC);
- Total resource - 53.5Mt at 5.6% TGC for 3.0Mt of contained graphite; and
- Exploration remains highly prospective as just 4km of the 54 km of strike, identified through EM surveys, have been tested.
Graphex also announced that offtake & financing negotiations with CNBM and China Gold (both State owned Chinese Enterprises) have continued with both parties making significant progress towards finalising a term sheet.
Analyst Comment: Whilst the increase to the total size of the resource is pleasing, it is the increase to the high-grade section that we see as the more critical aspect, as this area will form part of the mine plan in the near term. This along with the significant exploration potential that is yet to be tested (4km of 54 km of strike identified through EM surveys, all encountered graphite mineralisation) leaves us comfortable that Chilalo will be a long life graphite project.
More importantly Graphex also appears to be drawing towards a positive conclusion regarding their offtake and project financing negotiations with CNBM and China Gold (both State owned Chinese enterprises). Provided these negotiations are concluded (TSI estimate – 2Q17), the company will potentially have a significant re-rating aligning more closer to our current valuation.
The information in this email should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
Valuation: We have increased our valuation to $1.45 / share (share price $0.40 / share). The increase to our valuation is due to extending our mine life assumption from 7Mt to 10.5Mt. Full details of our Valuation & Investment Analysis can be accessed by watching the video.
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The information contained in this email communication is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Adam Kiley (AR No. 458224) is an authorised representative of Intelligent Financial Markets Pty Ltd (AFSL No. 426359).
TSI Capital Pty Ltd (TSI Capital) will only initiate coverage of a company that passes our internal investment checklist. Once a company has passed this checklist will we initiation coverage of the company as well as follow up with ongoing updates and commentary on that company’s activities.
TSI Capital does and seeks to do business with companies featured in videos on this website. As a result, investors should be aware that TSI Capital may have a conflict of interest that could affect the objectivity of our analysis. Investors should consider the information and commentary within this website as only a single factor in making any investment decision. The publishers of this video also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this video.
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