For those who don’t know, I thought I’d go into ThyssenKrupp a little. The German based conglomerate has an impressive array of companies. The ones concerning us are the steel and technology innovations arms. Their website boasts of their belief in Energy Storage Devices (for more information on ESD
http://hotcopper.com.au/threads/energy-storage-devices-the-real-driver-behind-graphite’s-potential.2349941/?post_id=13902512#.VE0KnywcTIU) and with a market capitalisation of ~8.5b Euros, sales of ~38b, free cash flow of ~600m, you quickly realise the scale of client we’re talking about. And that's in a bad year for them!
Their register is tightly held with, “around 90% of the capital stock for ThyssenKrupp is held by institutional investors”, and, “private investors hold approximately 12.5%”. With the Krupp family (a 400 year old German dynasty) controlling 20% directly themselves and BlackRock owning another 15%, I’d expect to see a lot of institutions/sophisticated investors waking up in the next few days to weeks to months and getting on board.
I suspect this will also give the EGT (whom I still believe to be SGL) comfort that the project is not only going ahead, but with powerful friends, and they too will publicly put their name alongside ThyssenKrupp.
My favourite lines are about assistance with funding, Merelani and confirmation the off-take is expected to be a “minimum of 20,000 t.p.a”.
- There are very few German banks/markets big enough to fund a company like ThyssenKrupp and having them open a door, further reducing any risk of a capital raising, I think we may be about to witness the fast track of a wholly debt funded mine, at European rates of next to 0%;
- If they’re working Merelani into the LoI I believe everyone is happy with the deal and it’s only a formality for the government finalise the contract (consider the fact it’s October and the Australian government still hasn’t passed their budget), Governments are notoriously slow; and
- “An initial and minimum 20,000 t.p.a”, how much more do they want?
When you combine ThyssenKrupp’s confidence in the projects, a second binding off-take (being worked on right now with the aforementioned), Merelani, the CSIRO “identifying” a market in 3D Graphene-printing, a 20% drilled tenement (who knows how much more is out there for the already impressive 2.5 year payback, 27 year mine, with a minimal strip ratio of 1.3 to 1) and the possibility of the EGT unmasking themselves, I believe we’re about to witness a correction and permanent move upwards in the share price.
My tip is that ThyssenKrupp, BlackRock and SGL will each hold up to 10% of KNL within 6 months. This highly profitable play will also be fast tracked, because their partners will help them obtain funding and they appear to want them producing ASAP.
