wohl - oder übel - Weile haben. Ist schon ziemlich frustrierend der Kursverlauf. Nicht wegen des Management, nicht wegen des Fortschritts, einfach nur aufgrund der Meinung des Marktes - der hier aufgrund fehlendem Hype`s die Chancen nicht sieht. Kibaran hat hier eindeutig den langfristig nachhaltigen, aber eben beschwerlichen Weg gewählt. Folgend mal eine Einschätzung aus HC vom "PatientMan" - wohl einem der Top 20 Shareholder...
On September 10th 2015, I wrote that:
"Investors in Magnis and Triton should do some cautionary research into Lamboo Resources (they may get funded but the risk of this not occurring is quite large in my mind)."
Triton announced in November/December that it wanted to raise $11,296,483 (before costs) at an issue price of $0.15 per share. Today, we've learned via Triton's Second Supplementary Prospectus that:
"... the Company has received 28 valid applications under the Offer for 268,214 Shares ..." which works out to about $40,232 of funds offered to date. It's clear that there is a lack of interest in funding Triton at the moment so its future appears bleak as predicted. Whilst this is terrible news for Triton's shareholders who I empathize for and harbor no ill-will (or short positions), this is excellent news for Kibaran Resources because it means that a large amount of graphite supply will not enter the marketplace in the future.
In fact, based on thorough research, I'm skeptical about any of the following companies adding to graphite supply:
Valence Industries, Talga Resources, Zenyatta Ventures, Mason Graphite, Focus Graphite, Energizer Resources, Northern Graphite Corporation, Alabama Graphite, Canada Carbon, Flinders Resources, Graphite One, Black Rock Mining, Globe Metals and Mining, Lamboo Resources, Lincoln Minerals, Stratton, Sovereign Metals, Eagle Graphite, Black Rock Mining, Lomiko Metals, Great Lakes Graphite, Bora Bora, Archer Exploration, Elcora Resources, Buxton Resources, DNI Metals, Cavan Ventures, and Caribou King Resources. Because, in my mind/research, none of the aforementioned companies present a solid business case worthy of an investment; due to a range of reasons such as poor: flake size distribution, resource size, future production estimates, freight-on-board costs, and/or a lack of off-take agreements. It's appears highly probable that none of the aforementioned companies will make it into production, and, that the industry shake-out will prove lucrative to the survivors who at this stage appear to be: Syrah Resources, Kibaran Resources, and possibly Magnis Resources.
Triton's future appears bleak because in my mind it does not provide a compelling business investment based on it's fundamentals. Ancuabe aside, a massive amorphous (microcrystalline) graphite mine makes little economic or business sense. I was amazed when it's share price rocketed higher in March/April propelled by its advocates espousing graphite quantity over quality; it was clear that they hadn't done any fundamental/industry/competitor/Chinese-off-take research. And, as I wrote in the Comments of a Seeking Alpha article on May 19, 2015 (trying to help a Triton advocate avoid losing their money):
"Regarding Triton, the $2,000,000,000 off take agreement with Yichang Xincheng Graphite Co (http://bit.ly/1EiqrkV) for 20 years requires a minimum flake size of 150µm (a.k.a. > 100 mesh). You may want to research the flake distribution (as opposed to the grade) at Nicanda Hill to determine in your mind whether this will come to fruition.
Ancuabe is a separate story (~92.1% of the graphite is above 150µm but it will require an additional US$50-100M to build the mine in addition to the US$110M at Nicanda Hill), and, unlike Nicanda Hill, it's a relatively small resource."
So, Triton will probabilistically (based on it's lack of funding interest) go out to the graphite graveyard in the short to medium term, to be joined by the remaining graphite hopefuls excluding: Syrah, Kibaran and Magnis. I think this is an excellent development for Kibaran and I welcome it with profit-driven eyes as a shareholder, who, wants graphite supply to be minimized in the face of increasing demand; driving a higher basket price in the medium to long term for our product.
Now, turning our attention to Kibaran whose share price has unfortunately been falling lately (on very low liquidity). In September on Hot Copper I wrote the following:
"Kibaran has completed step 3 of an 8 step process to secure the Untied Loan Guarantee. Based on the similarities between PCC SE's silicon project and Kibaran's graphite project, I am overwhelmingly confident that Kibaran will secure the Untied Loan Guarantee but we need to be patient because the following steps need to be completed (and are presumably occurring behind the scenes):
4) KfW IPEX-Bank submits a formal application for an Untied Loan Guarantee to PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (PwC);
5) PwC assesses the formal application and submits a report to the German Interministerial Committee;
6) The Interministerial Committee gives preliminary approval;
7) KfW IPEX-Bank informs on signature of loan contract/raw materials off take agreement;
8) PwC notifies the Interministerial Committee, informs KfW IPEX-Bank of its final decision and issues the Guarantee Declaration.
Patience required:
Although Mr Spinks has implied that financing could be completed in 1-2 months, PCC SE received their provisional cover note from the interministerial commission of Germany's federal government on 25 September 2014, made progress in January 2015, and announced that financing was concluded on June 11, 2015. Hopefully things progress faster for Kibaran but it's possible that they won't and investors should not let the passage of time dampen their enthusiasm for what is a compelling investment."
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Financing has not been completed in 1-2 months and it's clear from the share price that people are getting nervous. I don't know the future but it doesn't surprise me that a convoluted/bureaucratic process takes time liaising between KfW IPEX-Bank, PWC and the German government.
I look at the share price and, like we all do, I question: "Does the market know more than me? Then I remember the following attributes about Kibaran Resources and conclude that it doesn't:
1) A flake distribution highly weighted to the more valuable 150-500+ microns (100-35+ Mesh) above the industry average.
2) A freight on board cost that provides healthy margins and would be profitable even in a severe downturn.
3) Off-take agreement for 20,000 tonnes of graphite with ThyssenKrupp that will be negotiated annually, and, hopefully in a future bullish graphite environment.
4) Off-take agreement for 10,000 tonnes of graphite with a European graphite trader.
5) European as opposed to Chinese off-take agreements.
6) End users who have a use for graphite (refractories) that won't be reduced by a technological shift (i.e. if an amazing battery breakthrough came that didn't need graphite, Kibaran is safe).
7) A 'call-option-like' bonus that if graphite in batteries (or solar, or insulation) takes off exponentially Kibaran will benefit.
8) A German economy that uses 130,000 tonnes of graphite providing a lot of scope to expand our supply into Germany once the mine is built. Andrew told me in September that end users have told him to contact them once the mine is built.
9) As written here, potential debt funding of US$55-60 million (above the headline US$40 million), and, this is pure speculation; I think it's highly likely that ThyssenKrupp will take an equity position so that they can control the mine with their proxy votes (i.e. to prevent a Chinese or other buyer from taking control of their supply).
Now, we're all investors (as opposed to index-fund holders) because we believe by definition that the market is inefficient. Kibaran's share price behavior this year has merely re-enforced this core belief to me. Just as I was stunned that Triton's share price rose so high, I am stunned that Kibaran's share price is so low. I attribute it to the following reasons:
1) Lack of public awareness to Kibaran's fundamentals; it's an illiquid stock not followed by many people at the moment. As mentioned here, Kibaran is undervalued based on its economics using the probable debt/equity outcomes.
2) Fear that Kibaran won't source financing like Triton. This only makes sense if an investor feels like the Untied Loan Guarantee application is going to fall over. As written earlier I don't subscribe to this opinion because the German government has already given "in-principle eligibility for cover" and Kibaran has robust economics.
3) Unrealistic expectations about how long the financing process will take; I don't think Andrew Spinks even knows how long it will take (he can't control how long German government agencies take to process our application). Andrew told me in September that he hoped to have financing completed by the end of this year. I hope he's right but if it takes longer like PCC SE, I won't be surprised nor consider selling my investment.
4) A failure of investors to distinguish between the 'old commodities' like oil/coal and the 'new commodities' like lithium and graphite.
Finally, there is no doubt some Triton advocates will take issue with this post and maybe even criticize Kibaran (and/or myself) saying that our share price has also fallen lately (my intentions are definitely not to be offensive or inflammatory; Triton's existence impacts the graphite supply and hence Kibaran). It's true that Kibaran's share price has not risen substantially like I thought it would this year, that's life, that's investing. I draw solace from the fact that my prediction about Triton appears correct and I am confident that my Kibaran prediction; that Kibaran's share price will move closer to its fundamentals for those that are patient. The difference between Kibaran and the majority of the graphite industry, is that we have excellent fundamentals.
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