3) Kibaran Resources (KBBRF)(ASX:KNL) - Price = AUD 0.18 Kibaran...

3) Kibaran Resources (KBBRF)(ASX:KNL) - Price = AUD 0.18
Kibaran Resources are a reasonably valued lower market cap near term producer. Their projects include Epanko Graphite, Merelani-Arusha Graphite, Tanga Graphite, and Kagera Nickel. Their flagship Epanko graphite deposit in Southern Tanzania has a 25-year projected mine life with a reserve of 10.9Mt @ 8.6% TGC, for 0.94Mt contained graphite (with a good percentage of large flakes). The current indicated and referred resource is 23.3mt @9.4%, with upside exploration potential.
Their FS based on graphite production of 40ktpa reported a IRR of 41.2%, and a NPV of US$197.4m. They are in the later stages with off take agreements for over 40ktpa (20ktpa with ThyssenKrupp and 10ktpa to a German trader, 14ktpa+ with Sojitz Corporation). Sojitz is currently the largest supplier of raw battery materials (graphite and lithium), with ~60% market share and key downstream partners including LG, Panasonic and Samsung.

Initial mine CapEx of USD 77m, will mostly be debt funded, and production is planned to begin late 2017 after a 9 month stage one construction, assuming funding is successfully completed soon.
Kibaran plan to only upgrade production to 60ktpa once they have signed binding off take agreements. Production costs are estimated at USD 570/t FOB. The stock is reasonable value still with a market cap of AUD 45m. Based on 40ktpa production in 2018 my model target price is AUD 0.27, and based on 50ktpa production in 2019 a target of 0.35. I have assumed graphite selling price for all the graphite miners of just US$1,000/t to be cautious. Analyst targets are AUD 0.55, and 0.45, however they are using higher graphite selling prices around US$1,480/t.