It has been stated that China controls 70% of the worlds graphite supply. Fears were spread that China would drive down the price of graphite just like they did with rare earths to suit their needs.
Well it aint gonna happen folks.
China has already closed 20% of its graphite supply in one district due to the contamination of their water table in this region. Think about the long term damage they have caused to rivers, drinking water and the general livelihood of their people.
It is confidently tipped by those within the industry that another 30% of chinas supply will be cut also due to the same environmental issues. That is 50% of their supply taken off the table. What will that do to graphite prices? Not rocket science.
China is great at producing things cheap to the absolute detriment of its environment and its people. Once this additional 30% is taken from the current graphite supply in China we will have a BIGGER rush for a mine that can produce graphite in major quantities. Have a look at syrah and their recent agreements.
Not 10,000-20,000 tonne per annum but at least a minimum of a hundred thousand tonne per annum. This is where UNX comes in with a plan to be in production by late 2016 producing in huge quantities and supplying the worlds insatiable appetite for a growing commodity.
The ultimate contrarian investor James Dines quoted in 2012 that Graphite would be a mineral that would provide the biggest boom of all time for a material, whose uses are just being discovered.
Tesla is opening their USA plant in 2018 which will require an additional 500,000 tonne per annum of high flake graphite. Which graphite company can handle this demand?
Is it KNL - no Is it LMB - no Is it VXL - no etc etc (Look at their annual production forecasts and their total mine life - there is no arguing this point as their figures are very low due to very small contained deposits)
It may not be Syrah as they seem to have sold their current production capacity moving forward as per the recent results. (By the way read that announcement and you will uncover a totally new industy for graphite which could triple the current demand)
UNX at a 2% cut off has 26 million tonne of contained graphite free of deleterious materials as per PROVEN MET results. This is a mine life of 260 years producing 100,000 tonne per annum Mine life of 130 years producing 200,000 tonne per annum Mine life of 65 years producing 300,000 tonne per annum AT A DEPTH OF NO MORE THAN 60 Metres
What product can you dig out of the ground for around $300 per tonne and sell it for $1300 per tonne approx based on our flake characteristics? The brokers are quickly learning the vast potential of graphite and what the future holds.
The smart money men already realise this and are very happy to talk to our management team who in my eyes are doing a great job. They have only been talking and promoting the last 3 days. Cash in Bank is not the focus of any discussions as this could be handled today by a number of high net worth individuals. UNX does not need to address this issue at the moment.
I received from feedback from a couple of punters and a broker who have been in contact with UNX this week and they have been blown away by the presentation skills of board member Peter Sarantzouklis who has conveyed the exciting message UNX has to offer.
Look the bloke up - he is part of the management team at St George Bank - Chief Financial Officer - Do you think this guy would be passionately selling our story as part of this roadshow unless our story is world class - A broker friend of mine was blown away with the story conveyed in the past 48 hours and realised he is no tyre kicker with such credentials. They will be conducting more research on UNX to assess their next step in the very near future.
Thats enough from me for the moment.
Exciting Times are Coming
Matt
MNS Price at posting:
14.5¢ Sentiment: LT Buy Disclosure: Held
(20min delay)