Post by
youknowwhat on Jun 03, 2024 9:57am
NGC MORNING BRIEF
It is my belief that if the price of graphite does not go up all North American graphite mines will FAIL.
I went over first quarter results for NOU this weekend thinking I may take a position. I have decided against taking a position until there is more clarity in the direction of the price of graphite.
The following also weighed on my decision:
NOU burnt through $32,237,000 in first quarter.
NOU has about $95,000,000 on hand.
If they continue with this burn rate they will need to raise money by end of year. I have NO DOUBT they will be able to raise the required money to continue through 2025.
Beyond 2025 if China is going to do what China is going to do and continue with $4,000 a ton anode material FOB China. The auto and battery companies have to decide do we keep financing North American graphite companies to the tune of a couple of billion dollars or do we just buy anode material from China.
NOU economics indicate a selling price of $11,000 per ton for anode material. The choice will be up to the auto and battery manufacturers. THE PENCIL PUSHERS WILL BE WORKING.
I also took into account the fact that NOU is a new technology which uses a poison gas which was used in WW1. There is a liability using that gas.
They do not have a firm date to begin commercial production. I estimate somewhere between 2027 and 2030.
I do own NGC and suffice to say I have been critical of management. If I were to list all the criticisms the space required would make 1students posts look SHORT.
My position is quite simple I am NOT increasing my position in NGC and I am not taking a position in any other graphite mines.
UNLESS THE PRICE OF GRAPHITE INCREASES AND THE US AND CANADIAN GOVERNMENTS GET INVOLVED IN FINANCINGS THE FUTURE FOR NORTH AMERICAN GRAPHITE PRODUCERS IS NOT VERY GOOD.
Comment by
GripnRip on Jun 03, 2024 12:46pm
Mining is a tough biz, graphite mining more so...hense only 1 operating mine in NA If you want to get rid of your money that fast..instead of investing in graphite mining...get married without a pre-nup