LLG vs NOU From March/April 2019 corporate presentations and includes recent NOU financing (44 mm shares issued for $10.3 mm)
Nouveau Monde Mason Proposed graphite production 100,000 tonnes/year 52,000 t/y
Graphite grade 4.3% 28% (first 25 years)
Mining and milling rate 2,300,000 t/y 190,000 t/y
Waste/ore strip ratio 1:1 0.8:1
Capital cost $276 mm $258 mm
Operating cost $499/ tonne C $484/ tonne C
Mine and mill permitted no yes
Market Capitalization 219 mm
shares@$0.25; $55mm 136 mm so @0.40; $54mm
Cash and securities $10.3 + $5; $15mm $30mm+$26mm GRA; $56mm
Market Cap - cash $40 mm -$2 mm
What is wrong with this picture (besides Mason’s ridiculously low enterprise value)? NOU is proposing a 12 times larger mining and milling operation yet the stated capital costs are about the same ($276 mm vs $258 mm). NOU will have to mine and mill 6.5 times more ore for each tonne of graphite produced, yet their stated operating costs are about the same ($499 vs $484/ tonne C). Mason’s project is fully permitted. NOU’s project is not. NOU is proposing a large scale mining operation that will be about 9 times larger than the current Imerys mine at Lac-des-Illes (20,000 t/y C at 7.5% ore grade). The mine will be located 10 km from Lac Taureau, which is a popular tourist destination north of Montreal. The lake is dotted with hundreds (thousands?) of cottages as well as a number of high-end tourist resorts. In their recent Environmental Application NOU appear to be proposing dry stacking of tailings similar to Mason. Mason’s dry stacking choice added substantially to their capital costs ($25 mm if I remember correctly) and NOU tailings volumes will be 12 times greater. Although dry stacking avoids the risks of damn failures, the tailings will still generate leachate from precipitation recharge and sooner or later that leachate is going to end up in Lac Taureau. So good luck with that permitting application. We all know how long Mason’s application took.
Mason’s current low price makes no sense. LLG has the highest grade graphite project in the world whereas NOU is proposing a low grade mining operation that will be only about half the grade of Imery’s mine at Lac des Illes. And what is Imerys doing in the middle of all this? Are they just going to sit there and let these two new companies walk away with all their North American customers when their mine closes down in a couple of years?
The Mookster