EGR 5.88% 18.0¢ ecograf limited

I always like to read and re-read company announcements, as I...

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    I always like to read and re-read company announcements, as I often miss things on the first and sometimes even the second reading.

    Here are a couple of things that while perhaps I didn't miss individually, the significance wasn't fully apparent until after I had read both announcements.

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    Kibaran firmly believes that near term to medium term demand growth for graphite will be a function of Electric Vehicle (‘EV’) penetration rates (for which numerous independent forecasts are available). The interest in our battery grade graphite samples has significantly increased since the Company commenced its separate feasibility study with additional German support further aligning the Company strategy with German industry, which is expected to experience significant growth through participation in the EV supply chain.

    (Source: http://www.asx.com.au/asxpdf/20170621/pdf/43k2d21wvk2sv1.pdf)


    Based on direct feedback from the world’s leading major anode manufacturers, Kibaran is updating its demand model.

    “It is very clear that growth for battery spherical graphite is increasing at a greater rate than expected,” Mr Spinks said. “The Company’s feasibility study for production of battery-grade graphite will be revised given the increased demand.”

    The Feasibility Study for production of battery spherical graphite is a separate study to the recently reported Epanko 60 ktpa bankable feasibility study, which has been the catalyst for the commencement of the debt financing process for the development of the mine to produce natural flake graphite products for the traditional graphite markets.

    The spherical graphite feasibility study is now expected to be completed during Q4 2017 after optimisation work for the purification process and expanded production is finalised.

    Completion of the feasibility study is expected to add significant value given no value is currently attributed for the sale of battery spherical graphite within the Epanko 60 ktpa bankable feasibility study financial model.

    (Source: http://www.asx.com.au/asxpdf/20170926/pdf/43mmq2kln59k8b.pdf)

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    My two take-aways from these announcements are:-

    1) Significant interest from end-users has prompted management to increase its "demand model". This tells me that offtakes for (some, if not most) our spherical graphite are more or less a done deal.

    We were originally looking at throughput of 10ktpa to produce 6ktpa of spherical (extract from updated BFS - "The initial downstream processing throughput of 10ktpa to deliver approximately 6ktpa spherical graphite with testwork supporting a 50% yield which is superior to existing feedstock") and now we are looking to increase it. I wonder by how much??

    2) Completion of the feasibility study is expected to add significant value given no value is currently attributed for the sale of battery spherical graphite within the Epanko 60 ktpa bankable feasibility study financial model. - Um, hang on, this to me sounds like the decision to proceed with the SGP has more or less been made. Why would it "add significant value" if the decision hasn't already been made, or very likely to be made?

    There have been some posters on here recently, I can assume only attempting to scare shareholders, by suggesting we're going into "hibernation" and that a "massive CR and dilution in inevitable". There is absolutely no truth to either of these statements & no credibility should be given to either of the two posters that repeatedly post this nonsense.

    The only question now is; How long will we need to wait for the DFS? I'm chomping at the bit with excitement in anticipation of it being released.
    Last edited by Wilma85: 17/10/17
 
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