VRC vs MRC

I have been thinking a lot and researching the graphite space. Whilst we have 3 major assets being, Bunyu Graphite Resource in Tanzania, Gold Projects in Guinea and most recently Graphite mine and production facilities in Zavalievsky, Ukraine.

It would make sense and I believe others may have mentioned that we may or should, hive off the Gold Projects and concentrate on being a Graphite Player. I don't see any strategic value now in being involved in Gold now we have gone down the graphite producer path. We are now a fully operating graphite company, not just an explorer which is what we were when we bought the Gold Projects.

In fact the only other graphite producing company in Europe that I am aware of is Mineral Commodities Ltd (ASX:MRC). But more on that later.

Disposing of the Gold Play would leave us with Bunyu and Zavalievsky.

I know a lot of people are hung up on Bunyu and believe that Bunyu will be the saviour of Volt.

However I believe what we have in Zavalievsky is a lot more crucial to the immediate future of Volt. Sure it will be great to get the funding for Bunyu and its a matter of when not if. Maybe Volt will get rerated when we have access to $US40m to develop that mine and access the high quality graphite in Stages 1 and then Stage 2. But it will still be years before we make our first dollar from Bunyu.

What I am more interested in the here and now is the producing mine we have already making sales in the European Region where EV market is most accepted, encouraged, most EV manufacturing brands are located.

We know the plant has a 30,000 ton nameplate capacity yet we only produced 990 tons in a 14 day period.

Even if the plant produced the same over a 65 days/5 day working week in the whole Qtr that would be 4596 tons or 18,385 tons per year

At $807 per ton that is $14m a year, plus maybe $2m from quarry rock/road base + garnet which hasn't been mentioned last Qrtly. There is no reason why within 12 months we cant be generating $US20m from this operation.That is, just by fixing what is there. Sure, because they have been
mining all the good stuff we now have a backlog of the quarry rubble to remove and that is why there was mention of a mining plan and mining schedule, to create efficiencies, maintenance programs, carry critical stock parts etc

The more we can produce the lower the unit costs. If we can get our unit costs down to $US400/t then we can make serious money and have the plant fully self funding including paying for its own redevelopment, modernising, upgrades etc.

At present the imported Chinese graphite flake is costing closer to $US1000/t as $US300-$US400 is just freight then add $US700 for the graphite, we are selling our for $US807 and making more margin. So we will have no problem selling ours, so ramping up is crucial. In fact I wouldn't be surprised if Management haven't been directed or advised to seek pre-payments from customers on the basis of the high demand.

So back to MRC. Their graphite business Skaland in Sweden (they have other mineral sands assets elsewhere) appears to be the only graphite producer in Europe that will be a good comparison to Volt. Just quickly reviewing their announcements (and they are going to spin off their Graphite Assets into a new company) they are only producing about 2000 tons a year albeit higher grade compared to what we will be producing in a year.

Even this next Qtr I would expect at least 4000t from ZG based on last Qtr with continuous production with no increase in daily output.

VRC $75m 18,000 tpa vs MRC $75m 2,000 tpa

I know which one I will be buying more of.

PS looking forward to hearing about our new CEO and CFO and when they are starting. Onwards and Upwards Volters!!!