Comparing Mason to Nouveau Monde Graphite NOU vs LLG December, 2019 update
Data from June30 2019 (NOU) and June 30 2019 (LLG) financial statements and corporate presentations dated Nov 2019 (NOU) and Oct 2019 (LLG). Includes Mason’s recent sale of Nanoxplore shares for $28 mm.
Nouveau Monde Mason (Matawinie Project) (Lac Gueret Project)
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 Cap 262 mm
so (326 diluted) @$0.20; 136 mm so (148diluted) @0.20;
$52 mm $27 mm
Cash+securities - Acc payable-debt
$7mm $27.8 mm Enterprise Value $45 mm -$0.8 mm
What’s wrong with this picture (besides Mason’s negative 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 Environmental Application NOU appears to be proposing dry stacking of tailings similar to Mason. Mason’s dry stacking choice added substantially to their capital costs ($12 mm direct + 10 mm sustaining) and NOU tailings volumes will be 12 times greater. Although dry stacking avoids the risk of dam failure, the tailings will still generate leachate and sooner or later that leachate will end up in Lac Taureau. So good luck with that permitting application. We all know how long Mason’s application took.
And we’ve yet to hear a peep out of Imerys regarding either one of these two projects. This seems surprising, considering that their Lac-des-Illes graphite mine will be mined out in the next year or two and both of the above projects are searching for financial backers. What’s more, Imerys had to close down their low grade graphite mine in Africa recently (Okanjande mine, Namibia, 6% C), after only a year in operation. This mine had been slated for graphite production of 20,000 t/y, presumably to replace production from Lac-des-Illes. This kind of leaves Imerys in the lurch, don’t you think? Could it be that Imerys is up to something behind the scenes?
The Mookster