Good post Tangible, although personally I doubt there will be a...

Good post Tangible, although personally I doubt there will be a flurry of off-takes, but rather there will be a flurry of interest in off-takes, and John Park and Andrew Spinks will likely work with one buyer, possibly two, to work on a final off-take with. But I’d be more than happy to see a flurry of off-takes too!

For the added benefit of the unaware, one of the reasons we’ll have some immediate interest is the past historical info (and physical test samples) that are still out in the market place. As you would expect with a global graphite industry of 1.1mtpa (existing supply/demand), there are only a handful of actual graphite traders in the world, so it’s a small, niche industry, and there is a lot of retained info within their collective grasp. These guys often have the past specs/test samples for historical mines/deposits sitting on various desks. When they know something is about to be started (or re-started), they can act quickly to secure it (although I use the term “quickly” in a relative sense, because it can still sometimes be slow, but I mean quickly relative to a new unexplored and untested graphite deposit). Two examples that come to mind are VXL, who mentioned in an announcement that historic customers had begun talks on purchasing graphite, once they’d heard that the Uley deposit was going to be re-opened, and ourselves, with the EGT calling up KNL out of the blue to discuss the Epanko deposit, leading to the first graphite off-take on the ASX.

So, following on from Tangible’s posts, and my earlier posts with the geo report links on Merelani graphite, we can surmise with a high degree of probability that the traders/users already have a significant amount of info on the Merelani deposit, flake distribution, testing results, etc.

Finally, while I can’t back up this next point, I will mention this. Andrew and Grant and John and the team have been thinking/working/discussing Merelani for a couple of years now (the premise that they only started negotiations with Richland/Tanz Govt shortly before officially announcing a MOU in Feb this year is highly doubtful). It is highly likely that behind the scenes discussions have already taken place with potential end users, given that they are looking to fast track into production, and they will have ensured that they were comfortable that the demand was genuine before committing to a second operation. As with the recent cap raise, which raised some money in advance to be earmarked for work on Merelani, so it’s highly likely that management have already done a fair bit of legwork on Merelani. They know they have to hit the ground running to be able to fast-track into production, and they have got themselves in the best possible position. The newsflow, while already excellent this year, is going to step up a notch once Merelani is announced, as there will be a number of upcoming catalysts for further announcements.