Spent some time yesterday to draw up the following table comparing the resource size, grade and more importantly the $ market cap (based on yesterday's prices) per tonne of resource held.
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
Column 8 |
| 1 |
Company |
Resource location |
Resource (mtonnes) |
Resource grade |
Contained graphite (mtonne) |
Market cap ($m) |
MC per tonne of graphite (domestic currency) |
MC per tonne of graphite (AUD) |
| 2 |
Alabama Graphite |
USA |
65.2 |
2.7% |
1.77 |
13.8 |
$7.80 |
$7.76 |
| 3 |
Buxton resources |
Australia |
2.3 |
20.1% |
0.46 |
20.0 |
$43.48 |
$43.48 |
| 4 |
Castle minerals |
Australia |
14.4 |
7.2% |
1.04 |
3.0 |
$2.88 |
$2.88 |
| 5 |
Energizer resources |
Madagascar |
124.4 |
6.3% |
7.88 |
32.9 |
$4.18 |
$4.47 |
| 6 |
Flinders resources |
Sweden |
2.8 |
10.7% |
0.30 |
34.2 |
$113.97 |
$122.01 |
| 7 |
Focus Graphite |
Canada |
12.7 |
14.4% |
1.83 |
52.1 |
$28.48 |
$30.49 |
| 8 |
Graphite One |
USA |
284.7 |
4.5% |
12.76 |
18.0 |
$1.41 |
$1.40 |
| 9 |
Kibaran Resources |
Tanzania |
14.9 |
10.5% |
1.56 |
38.0 |
$24.36 |
$24.36 |
| 10 |
Lamboo Resources |
Australia |
7.1 |
4.7% |
0.34 |
102.0 |
$300.00 |
$300.00 |
| 11 |
Lincoln minerals |
Australia |
2.3 |
15.0% |
0.34 |
16.0 |
$47.06 |
$47.06 |
| 12 |
Mason Graphite |
Canada |
61.9 |
15.9% |
9.85 |
54.1 |
$5.49 |
$5.46 |
| 13 |
Northern graphite |
Canada |
93.8 |
1.7% |
1.61 |
38.8 |
$24.11 |
$23.98 |
| 14 |
Ontario graphite |
Canada |
98.3 |
2.1% |
2.04 |
n/a |
n/a |
n/a |
| 15 |
Strategic graphite |
Australia |
6.6 |
8.7% |
0.58 |
18.0 |
$31.03 |
$31.03 |
| 16 |
Stratmin Global |
Madagascar |
5.7 |
4.1% |
0.23 |
7.8 |
$33.91 |
$62.21 |
| 17 |
Syrah Resources |
Mozambique |
1150.0 |
10.2% |
117.30 |
895.0 |
$7.63 |
$7.63 |
| 18 |
Talga resources |
Sweden |
11.9 |
18.1% |
2.17 |
49.0 |
$22.58 |
$22.58 |
| 19 |
Triton Minerals |
Mozambique |
103.0 |
5.5% |
5.69 |
166.0 |
$29.17 |
$29.17 |
| 20 |
Valence Industries |
Australia |
6.5 |
7.1% |
0.46 |
62.0 |
$134.78 |
$134.78 |
| 21 |
Zenyatta Ventures |
Canada |
45.2 |
3.1% |
1.42 |
112.5 |
$79.21 |
$78.80 |
| 22 |
|
|
|
|
|
|
|
|
| 23 |
High |
|
|
|
|
|
|
$300.00 |
| 24 |
Low |
|
|
|
|
|
|
$1.40 |
| 25 |
Average |
|
|
|
|
|
|
$51.56 |
| 26 |
Weighted average (by resource size) |
|
|
|
|
|
$10.22 |
|
| 27 |
|
|
|
|
|
|
|
|
I know that the $MC per tonne of resource calculation for some of the companies above are a bit distorted purely because they are not pure graphite plays, but it should be enough to give an idea of where TON is placed (in comparative multiple terms) against competitors. As you can see, TON's market cap suggests that shareholders are paying approximately $30 per tonne of their graphite resource, compared with the industry weighted average of $10.22.
Compared with SYR (being obviously the most comparable company), their shareholders are paying around $7.6 per tonne of their graphite resource. This basically suggest to me that TON's current market cap has priced in the expectation that Nicanda will contain a minimum of 16mt of graphite, or approximately 160.7mt at an average 10% TGC bringing their total resource, including Cobra Plains, to ~264mt at an average grade of approx 8.3%.
Based on the assay results to date and, given the grade of their high grade zones and the expectation that TON has a resource size that rivals or exceeds SYR, this means that there is an enormous upside potential for TON's sp if Nicanda can return an additional >160mt or a lesser tonne but higher average grade than 10%, which is definitely not unrealistic.
And given TON is now fully funded, are aggressively proceeding with their drill program and management's acquisition of 100% of the project, I'm convinced that I will be in for the long haul.
