Valuation Disconnect - 3 parts, page-10

I called it 6 months ago, and calling it again: GPX will be the worlds largest graphite producer outside of China by 2020.

The only update since my original post is: The GPX-CN Docking JV will be the worlds largest graphite producer outside of China by 2020.

See original logic above. It's not rocket science, just simple market-based rationale. And market developments since further support the theory:

GPX-CN Docking JV: now a fully financed project, and the way the deal is structured (CN Docking with only 50% offtake), we now have the Chinese Govt commercially motivated to market the crap out of GPX product - within China, and one would assume there is no better in-country marketing arm than the Chinese Govt - and on the open global market, which the superior quality of GPX product will eventually rule (more in the SYR point below)

SYR: valuation based on production of 350ktpa + downstream processing of this (in concept only, still a pipedream) yet they only have offtakes in place for less than half planned production, for only for 3-5 yrs. SYR product is much poorer quality than GPX, half the TGC and basically no expandable qualities. I expect some samples of GPX product might find their way to all SYR's existing and potential customers at an appropriate time, and I'm guessing some or all of these buyers might opt for the better product, if the price is right (and I'll bet it will be)

MNS: $330m...the valuation mystery continues. No offtake or financing in place (despite both MOUs being announced in Dec 2014-Mar 2015, and both quietly slipping off the table over 2015-16), and their trading halt-led announcements continue to get more desperate and more hair-brained as time goes by:

> an MOU (Magnis loves MOUs) for an unspecified amount of project financing to sell an unspecified quantity of graphite to Russia’s ROSATOM to build nuclear reactors in unspecified places around the world?

> an exclusive MoU with Townsville City Council to investigate building a 15GWh Lithium-ion Battery
Manufacturing Plant in Townsville?

> joining a global consortium to plan a new Li-Ion battery factory in the State of New York?

> building the first mine on Mars (ok I made this up, but it's as good an idea as the previous 3)

There's really no point talking about any other graphite hopefuls as SYR has killed the market for the other 30+ listed battery chasers, MNS is in La La Land, Talga might do something clever with graphene one day, but that's about it. Who in their right mind would write a cheque to finance any other graphite project with SYR and now GPX-CND coming into production with more product than the market can absorb?

Which is why:

The GPX-CN Docking JV will end up the worlds largest graphite producer outside of China.