Interesting how analysts still do not understand that you cannot...

Interesting how analysts still do not understand that you cannot apply the concept of offtake to a graphite deposit as ALL natural flake graphite has to be qualified before sales can commence and it is virtually impossible to sell natural flake graphite before the resource is ever mined and concentrate produced.

By the way, SiO2 is inherent in ALL natural flake graphite and levels range from ~40% to ~57% depending on the location taking from a pit / resource and can also vary across the resource. SiO2 is measured as a percentage, so the comment about upgrading or purifying to liberate SiO2 plays only a small part in the overall cost to purify either through caustic or thermal liberation.

Secondly, any graphite company that believes it can flood the market and that prices will not crash are in a bewilderment that demonstrates a lack of understanding basic economic forces of supply and demand and market equilibrium. There are more than 10 mining operations in China that have 150,000 + MT of capacity that can increase at will and can crush any new entrants including the so called "mega" mines.

Finally, playing in price elastic markets (i.e. refectories, foundry, steel) in todays market environment for any new entrants is a very risky and dangerous game. New entrants will be forced to sell below production costs which will lead to shutdown as was seen from Flinders in their suspension of production announcement in the past two days.

The goal is define and understand less elastic markets which are opaque and difficult to penetrate and by doing so will provide for less elastic price mechanisms leading to higher average prices and margins.