Before people make decisions about whether to buy or sell - take a look at the company achievements in past 3 months from where they were a year ago- there are far too many people shouting their mouths off on this forum and without really knowing what company is up to and partly due to lack of reading and talking to industry experts- some people are just agreeing for the sake of agreeing
Achievements
1) PFS on time - PFS highlighted initial robustness of project - large maiden ore reserve !!
Pre tax NPV of US$1.31B, 87% IRR and pay-back of 1.4 years based on 22-year LOM based on optimised Measured, Indicated and Inferred Resource categories
2) 9/01/17 Volts products validated by end user groups- (Western and Chinese end user groups)
3) 19/01/17 Positive expandable graphite test work results
Namangale Concentrate highly suitable for production of commercial grade expandable graphite via german metallurgical laboratory ( Global specialist/expert in graphite testing and analysis) - excellent expansion volumes achieved for large to super jumbo flakes compared with products from other origins
4) Trevor Matthews to fast track DFS delivery in 2017
Incl. the appointment of KEY PERSONAL AND ADVISORS !! Moving forward the emphasis is to finalise key sales agreements
5) Secured BOA on small scale start up which can open door to other end users post DFS
Local communities supporting project
Management confident mining licence will be approved/GRANTED by Q3 17
Formal request for post access. land and facilities lease
Investor and project finance meetings held by CEO -TM in London and New York
7) Binding off take agreement with US group - more will follow IMO
THOSE WHO ARE NEGATIVE ABOUT VRC AND CONTINUE TO BAG THE COMPANY should ease up as should the rampers and allow the news flow to dictate company progress- sure the graphite market is slowly coming around but will take time !!
Now the fact that VRC actually got a BOA even though the offtake numbers are low suggests to market we have the right mix of flake category which is much higher basket $$$$$ price to our peers and competitors - also its not just about the battery market - we can tap into other industry sectors east to west as we all are aware of !! -
Industry Overview
A flake's chance in cell: quantifying graphite demand As a follow up to Start me up - EV's and grid storage to drive lithium demand (18 May'16), in this report, we attempt to quantify the impact on demand for graphite from the rapidly growing Lithium-ion battery ("Li-B") sector. A major increase in installed Li-B capacity to 2025 is anticipated to drive a major increase in demand for graphite: Based on our modelled growth in the Li-B market (and certain assumptions for penetration rates for various battery chemistries), we estimate total demand for graphite (natural + synthetic) from Li-B’s to increase from 140kt in 2015, to +1Mt in 2025, representing a CAGR of 23%.
However, demand growth for natural flake graphite in Li-Bs is reliant on a shift by end users away from synthetic graphite: Our research suggests that 60% of Li-B anode material is currently sourced from synthetic graphite. While the current preference for synthetic appears driven by requirements for consistent purity and lower quality Chinese graphite dominating global mined supply, cost savings of using flake versus synthetic represent a significant opportunity in our view. If natural graphite can achieve and maintain 60% market penetration by 2020, we estimate that annual demand could increase by +660% to 792ktpa by 2025.
Traditional markets represent the largest market opportunity for natural graphite in the medium term: Traditional graphite markets (ex-Li-Bs) accounted for an estimated 86% of demand for natural graphite in 2015. Looking forward, we see an opportunity for natural flake to capture market share from synthetic/alternative carbon sources due to improved product quality and cost advantages. We estimate that by 2020, demand for flake graphite from these markets could exceed 776ktpa, representing a market share of 74% (vs Li-Bs at only 26%). Everyone wants exposure to the Li-B market - the fact is the market isn't that large...yet: While demand could increase significantly over the coming decade, this is offset by the potential for a significant supply side (ex-China) response.
We estimate flake graphite demand from the Li-B market at 276kt by 2020, versus potential production from ASX-listed graphite companies targeting the battery market of 440kt. Longer term (by 2025), we estimate that global mined flake graphite supply would need to increase by +350% to 1.7Mtpa to satisfy forecast demand from the Li-B market and traditional applications.
Graphite prices: Our forecasts for a benchmark (95% TGC) graphite product call for average "basket" prices of US$770-US$926/t between 2016-2025, compared to current basket prices of US$750-850/t. We note that prices have fallen by 50-60% from their highs in 2012, despite a ~40% reduction in mined output and evidence of increasing demand from the both the Li-B and traditional markets.
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