Post by
youknowwhat on May 31, 2024 10:20am
NGC MORNING BRIEF
Firstly the BOD and senior management has postponed some of their compensation which is a small positive thing. Thank you.
They have reduced some expenses by approximately $700,000 which is a step in the right direction. RATHER THEN LOOKING AT NGC FINANCIAL POSITION I think we can all agree that the financials are horrible and the elephant in the room is that Chinese anode material is currently being sold for $4000.00 per ton FOB China. The price of graphite must go up worldwide or nothing makes economic sense. NORTH AMERICA MINES CANNOT COMPETE WITH CHINA. China is subsidizing graphite mines and dumping product into the USA.
The USA needs to pass anti dumping legislation in order to put an end to the crazy price coming out of China. Canada and Mexico need to follow the USA with legislation that mirrors the US anti dumping legislation.
Unless the USA passes anti dumping legislation and starts to finance Northern and Nouveau through the Department of Defence then and only then will the supply chain for graphite come to North America. Should the DOD in the US delay any longer the deadline of January 1, 2027 set by the Biden administration will not be met.
The whole North American graphite mining industry will not survive unless the price of graphite increases substantially. Northern and Nouveau along with the likes of Lomiko, Focus, Graphano and others will never get into production to supply the EV market.
Going by my memory the last PEA that I saw from Nouveau they based their economics on $11,000 per ton for anode material. That statement is not meant to bash Nouveau but rather show the need for graphite prices to rise. Nouveau has done a lot of things very well they raised money from GM, Panasonic and Mitsui. They also are very focused on producing anode material and they are not running every where looking for other ventures. They are keeping their eye on the anode ball.
Northern on the other hand is the poster child for running all over the world looking for deals to sign. This is a company that signs LOI’s and never reports progress on them or backs out of them as is the case with Neograf. Northern is not in a position to run the company with a CEO and CFO that live in Europe. Time to admit it and make the changes that are necessary to bring senior management to Canada. Northern Graphite has champagne tastes on a beer budget that needs to change.
One of President Joe Biden’s major initiatives is the EV revolution and it is an election year. The Biden administration by financing and bringing the anode projects to Northern America will be a “win” heading into the summer campaign season. A bigger win for the Biden administration would be if Northern decided to locate an anode plant in the US in a swing state or even a red state after all they only have a LOI that they can back out of in Baie Comeau. Just think the Biden administration could pound the campaign slogan, “ We are creating well paying American jobs”. We shall see I am sure the minds at Northern are thinking of many angles.
NGC MORNING BRIEF believes the Canadian graphite industry depends on financing from the US government and the US government needs the Canadian mining industry or their EV revolution may not happen.