Syrah with BHP Billiton Management, page-28

Hi, I think that is our point of divergence, I am in the minority here so my opinion is not popular with either camp. I am neither short nor long Syrah. I dont believe they will go bankrupt (because they have enough cash at least to completely build the mine) and at the same time I dont believe they will achieve more than 100.000tpa output anytime soon (probably by 2020), let alone the unrealistic (and ludicruous) figure of 360.000 (which is a joke from syrah management IMO).

I think they will survive by diluting shareholders (most probably a capital raise mid-end 2017) : 30M$ ? 50M$ ? 70M$ ? who knows...) + selling 10.000tpa - 30.000tpa during the first one (2018)-two (2019) years of production/commissioning. IMO that is enough for them to survive and maybe even breakeven. at 30.000tpa assuming 600$ per tonne (mostly small flakes at an average of 94% purity) that is 18Million$ of revenue. Their all in sustaining costs could be at 500$ - 600$ per tonne which is a breakeven level.

But I do agree with you that it is extremely unlikely Syrah would be making any serious money for investors anytime soon. This is the industrial Minerals world, completely different to Precious Metals / commodities (oil, copper, iron...etc). Industrial minerals are notorious for recquiring huge amounts of time of commissioning and tailoring production to both ore resources specificities (and surprises) and customers needs and preferences.

Metallurgical tests are helpful but are done at laboratory scale and at best case scenario at an extremely small pilot plant scale. They do not represent conditions of production at large commercial scale which is a completely different matter. That is again why i am not worried about Syrah flooding the market, even if they want to, they technically cannnot, for me now syrah is a company for dreamers....reality will reveal its face very soon. At 200M$-300M$ market cap and after they pass the toothing commissioning issues, I would start seriously thinking about investing in Syrah. lets see if the market will give me this opportunity ! Until then, I wish them success at least achieving 10.000tpa by 2018.

The last thing we want is another failure in the graphite market (after flinders, triton and valence industries).