PatientMan,
I must congratulate you on all the work you are doing to justify that Syrah market value. I believe you should be working for Syrah since you have more passion and i have more trust in you that Syrah will be successful.
In reviewing your last post I question the bask price you used of 624/mt. This price is very optimistic with fact the flake graphite market is got excess supply and the fact any new graphite mine must offer customers discounts to market prices to get them to test. I believe Syrah should be targeting a basket price of 500/mt. Still realistic? We all know that the price charts you provided are not what most graphite buyers pay since prices are kept confidential between buyer and seller.
As for Admin cots projections they just stated they are spending 20M per year so my question to you is your calculated amount of
$15,442,500 Still realistic?
We all read the compensation they gave their new CEO. What they are paying their management and Directors is substantial compared to what is paid by existing operating graphite companies. This is why Syrah has such high Admin cost that I reported in pas post that makes their cost higher then most Chinese and Brazilian graphite mines.
As for processing costs they will most likely increase if Syrah only sells 83,884/mt in the first year.
I and I assume most investors are not believing Syrah will sell anywhere close to the 83,884/mt in year First Syrah has to prove to the market they can make a consistence and quality graphite and then second customers take time to test and approve a new supply. All of this takes time
- Do you trust Syrah projections of Processing Cost at only 83.6/mt? What sales volume do you believe Syrah based their 83.6/mt projected costs on? Please also remember Syrah will have high fuel costs to run generators and operate the dryers. I personally believe it will be impossible for Syrah to meet this projected processing cost.
This is why Syrah will have negative cash flow and thus is going to ask investors raise 50M in additional capital.
I like your question about what will the market do if Syrah sells all their graphite at 300 to 500/mt. I believe they will be forced to do so so in 1 year from now we will start to find out what the results are. yes Syrah is hopping to have lost of excess working capital and thus they are hopping to sell at negative cash flow long enough for current producers to close down and for the market demand to grow. Then once all this happens they hope they can raise their selling prices. If this happen I would expect the share price to decline way below 3 per share which will upset you and many investors.
I really like the comment Tobyjack posted on behalf of Melua related to their current share price: This tells it all.
- : As @meluastated a while back - "The money is made on discovery" - that's what I did.
Unless you invest in mining companies prior to discovery, you will struggle to make meaningful gains (assuming you are a buy and hold investor). SYR is a Tier 1 graphite project but a quick look at the chart shows that unless you were in the stock prior to discovery, it's been a roller coaster ride since and the share price is back where it was four years ago in Feb 2013.
SYR highlights just how difficult it is to make money investing in mining companies with a buy and hold strategy if you come in late.
Because of the long lead times from discovery to production (an average of 8 years) dilution usually kills any upside.
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