what lies ahead, page-19

Hi, my previous comment got moderated due to it discussing Bass + Syrah and being considered as cross-promotion, indeed this is not a Bass thread, and if you wish to discuss Bass you may post in the Bass Metals (BSM) thread, but to respond to your post suffice to say for Bass that its not only 6000tpa but targeting 24.000tpa+ and that its in a different market to Syrah (large flakes VS small-medium flakes) so not really as sensitive (if at all) to chinese competition as syrah's graphite. Regarding Syrah, I will copy my previous comments on Syrah while deleting those of Bass :

Hi, some points :

1- While Syrah's graphite is mostly small-medium, Syrah's strategy is to produce a high purity concentrate run of mine at 96%+ which again if successful it would help it competing with chinese graphite (92%-96% purity).

2- Another comparative advantage for Syrah, is size (economies of scale), Syrah is basically building the biggest graphite processing mine in the world (the biggest now is in chinaat max 100.000tpa), with 300.000tpa+ as a target it would become the biggest in the world by a alrge margin, with 20% grade and cheap labor in mozambique, you bet they would be by far the lowest cost producers in the world (keepin mind chinese labor cost in increasing over time, and small graphite mines are already unprofitable, environmentally harmful and are being closed).

3- even if Syrah cannot produce 300.000tpa in the next 5 years and only succeeds in producing a modest 10% of its target capacity during the first two to three years of production, that is still a huge 30.000tpa amount, enabling it to stay afloat, and probably not loosing money (if the production is at high purity and they are able to sell it). in other words, given the extremely high ambitions of Syrah, even a failure may still be financially considered as a moderate success ! IMO the high valuation of Syrah has to do with this last point. Institutions are aware that Syrah is building a monster of a mine, and a delay to ramp up production is not a big deal, given that a small % of the goal is already something.

I dont believe Syrah could succeed in producing 300.000tpa of graphite anytime soon, that is why i am not worried of syrah flooding the market with cheap graphite (I would be surprised if they are able to produce and sell just 10.000tpa of 96% graphite in 2017, or more than 50.000tpa in 2018, by that time world demand would be already higher), however underestimating syrah and counting them off just because of their crazy unrealistic ambitions would be a strategic mistakes for investors : Syrah IS THE ELEPHANT IN THE ROOM, and even a failure wouldd still be a success if they are able to cover their operating costs and stay financially alive in the next 2 to 3 years (IMO syrah would need another big capital raise / dilution round fior their mine in mozambique, not even counting their plans for a spherical plant in the US).

Happy new year and graphite investment to all,