Focusing on Bissett Creek Flake Graphite Deposit
Recently announced significant increase in estimated resources
Message: NGC Updates
Posted on SH, post here FYI.
----------------posted on SH 26 Nov 2012-------------------------------------
Your post is quite useful in a sense that it has several references in one collection. This would save a lot of time for fellow readers/posters. I have read them all, but still found the references handy. There is a "companion" commentary from Michael Berry (the senior Berry). This has been posted by scissors on 22 November 2012 and it deals with "management, management and management" of a company. A must read.
IMO, there are a few salient points that worth keeping in mind for NGC.
- Conservative management that operates within the rules and always delivers on time as per their published game plan. If not, they would let the shareholders know and give reasons why things have been late (and deliver by the new target date). They remember what they have promised and would not try to cover things up.
- Not overpromised or used optimistic values. Examples are: resources, flake size distribution and purity of the product and conservative pricing. Some other companies would only give the lower limits for flake size and purity but claim some high sale prices (not entirely transparent to potential investors). It's always a good practice to come clean up front to state the range (min and max values of the flakes and the max value for the concentrate purity and a conservative pricing.
- I have walked the property and found that the deposit is quite shallow (thin overburden) or right on the surface, so their current shallow (and inexpensive) drill program should yield good results and soon in terms of resource expansion and higher grades which would reduce the operating costs as stated in the BFS.
- The average concentrates from the processing facility at Bissett Creek would be in the range 94-97% (the usefull range for reasonably good pricing for large flakes). The flake distribution is excellent (a large percentage is in the large and jumbo size that would fetch premium pricing). This along with purity (some up in the 99%) would be part of what Chirs Berry calls the "foot print" which include ore grade and other things such as the impurities that would have to be "filtered out" and disposed off (cost $$$).
- There is plan to upgrade the concentrates to 99.9% for high-grade battery application. With a capital expenditure of about $10M for an upgrader module they can process about 1/4 of the concentrate output for premium pricing (around $8000/tonne). I would be very careful if someone is claiming pricing in the range of $20k-40k/tonne. This price range is for really good stuff (e.g. high grade synthetic). I would be willing to settle for 8k/tonne for a good product (99.9% plus) coming out of an upgrader. Ref: Corporate Presentation and conference call in July, the day after the release of the BFS).
- The currently SP is extremely low and there are quite a few upside potentials, such as financing and off-take agreements. My guess is that the next NR would be on the approval of the MCP before the end of 2012. If this is late then management will provide explanations to everybody in an NR, and will try hard to meet the new target date.
Michael Berry would approve this style of management, imo.
DYODD and make your own assessment.
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