I don't think the SYR DFS will include the spherical graphite preliminary economic study (PES). That was why SYR stated they are doing a separate PES for spherical. That means their original intention was to get the DFS announced based on the offtakes with Chalieco and Asmet and then build on that with the Spherical PES. Maybe this has changed now and they will include the spherical graphite plan. If so, then that might be contributing to the delay? I don't know.
However, I suspect that the SYR DFS is delayed due to waiting upon the final decision by Asmet about how much they will offtake. That will mean the Spherical PES will follow on later. That means we might see a DFS for 200kt production first up. Then a follow on update for an additional 60kt to 120kt production when the PES is released. The SYR MD has mentioned the aim to do 400kt production, but that is aspirational in the early days IMHO.
I have previously posted that there are 3 options for offtakes.
1. Supply to trading houses
2. Supply to end users
3. Combination of 1 & 2
There is a 4th option emerging and that is the 'Value Add Option'. Option 4 requires in-house processing and additional technical capability to make an intermediary product rather than just getting offtakes for the raw material. More risk involved and more capex needed of course. Option 4 could be phased like VXL is planning or it could be up front like SYR is planning with their spherical graphite plant. The value add product could be have offtakes with either trading houses and/or end users (eg. battery makers).
It all depends on how many clients/customers the company wants to deal with directly. The more clients a company has the more complex the business dealings become. The business would become massively complicated and extremely risky when one adds the technical complications of varying specifications and especially the trade secrecy considerations into the equation.
SYR's offtakes with Chalieco and Asmet are clearly option 1. The spherical graphite plan is clearly option 4. IMHO the super pits need to avoid option 2 and maybe option 3 or else there is a high risk of being overwhelmed and getting nowhere fast. MNS is clearly Option 1. TON's strategy is confusing at the moment. TON looks to be heading into Option 2 or Option 3 at best (if some offtake comes from the AMG relationship).
The boutiques are left with option 2 because they won't have the capacity or volume to attract the big trading houses. There might be some smaller trading houses to target, but I can't think of any at the moment. Even if there are smaller trading houses for the boutiques I'm sure they will be screwed down on any chance of getting a good price premium. They don't have economy of scale to overcome selling at prices closer to bottom of the price spectrum that trading houses would be looking for in their offtakes.
That leaves the boutiques with a business model of finding the end users to supply. That comes with dealing in the many technical specifications of graphite that vary between end users. A potential nightmare for a start up graphite miner. The more moving bits the more likely a failure will occur.
Trading houses that specialise in supplying many and varied end users can cope with the challenges because they have built in processing and technical capability already, plus the all important customer relationships established. A boutique green fields graphite miner is certainly starting behind the 8 ball if they need to deal with more than one or two end users. IMHO their best hope is to find one or two end users that will offtake all of their raw material as it comes out in the ROM concentrate. Maybe that is what TON is hoping to achieve as well?
