Be careful you and other shareholders do not want to be drinking the Kool-aid that Tolga and Jim are drinking. Tolga and Jim are promoters and are very good at promoting a story. So good that they created a USD 800M public shareholder values Jr Graphite mining company.
Not the issue is how do they justify to their shareholder that their store is real and can become reality.
Just because Jim (A promoter) say they are 90% sold out do you and other shareholders really believe him? Yes they have offtake agreements but these offtake agreements are not take or pay contracts. All they are is a agreement to purchase X volumes per year over some X period of time and are base on requiring Syrah to offer them X % discounts to market prices. The offtake buyer first has to get customers to approve a new supplier which takes time and second has to offer the their customers enough of a discount in order for the customer to stop buying from it;s existing suppliers and switch to Syrah Resources as their primary supplier. For this to happen it takes multi years and the customers.
The next result is Syrah is be luck if they sell much more then 20,000/mt in it 1st year of operations.
Thus at this 1st years volume Syrah will lose money knowing that Admin costs will be at least 400/ton and their projected operational cost will be much higher then their projected cost of 290/ton since they will only be selling about 5 to 6 % of their capacity.
The another major issue Syrah and all other graphite companies are having today with all the over capacity is the decreasing market prices. Jim and Tolga are dreaming and giving shareholders and investors a lot of their Kool-aid when it comes to their basket selling price of 1000/ton delivered to the port. No one knows what is a realistic basket price to use but my guess is Shrah should be using 500/mt max. (Remember they need and must sell large volumes close to their annual capasity of 350,000/tons in order to come close to their projected mining and production cost of 290/ton
Syrah is now within 6 months of no longer being a Jr. Graphite Mining company (Defined as a mining company with no revenues) and thus becoming a Graphite Mining Company with some revenues and when this takes place the story they been promoting to shareholders ends and now reality starts in and the company has to now justify it's market value. The investors that are shorting the stock value have stopped drinking the Kool-aid and believe that Syrah is overvalued and will not be able to justify their current market value.
Yes in next year or so we will all be able to look back and see if what I am saying and I assume what all shorter are thinking comes true or not.
SYR Price at posting:
$3.05 Sentiment: Sell Disclosure: Not Held
(20min delay)