Some perspectiveIt is hard to imagine that this stock could be $30-40 in the next 6 months, but that is a real possibility, even though the market is not giving it the respect many of us believe it should be getting.
I will share my NOT story from a few years back. When NOT announced hole 49 extending the high grade nickel deposit from 300m to almost 1000m, the share price moved from 62 cents to...70 cents and then back to 60 cents. I was mystified. I had just moved all in on this news and was ready for a big ride, but the market only shrugged. I stayed all in as I was convinced the market was wrong here and that things would move up "soon".
Well, it took 2 weeks before the share price moved, and move it did, from 60 cents to $3.00 in the next 2 weeks. It took 3 institutions 2 weeks to complete their due diligence and start to buy aggressively. If it took 2 weeks for these institutions to "get it" when it came to something as simple as high grade nickel, I am not surprised it is taking the market this long to figure out our high purity graphite.
When we do have our university studies out and our RE 43-101 with tonnage and grade, do not be surprised if again, it takes a few weeks for the market to get it. TCC has been way ahead of the market and the analysts on this one and we will be again.
I crunched some numbers this weekend and I believe we will end up with something between 3 and 4 million tons of pure graphite, enough for a 30 to 40 year mine life at 100k tons per year. Anything higher than this will yield only minor benefits for our share price as we get very little value for production past 20 years.
So tonnage will not be an issue even it the West pipe disappoints a little on the grade part. The In Situe value will be tons of finished graphite times the value per ton end users are willing to pay us for it. So here are some numbers to play with until we get actual numbers.
Using the base case of us having 3M tons of finished graphite and 60M shares out, I get the following possible share prices in a take over situation:
3M tons at $3000 per ton gives us $9B In Situe
Buy out at 5%: $7.50
Buy out at 7.5%: $11.25
Buy out at 10%: $15.00
3M tons at $8000 per ton gives us $24B In Situe
Buy out at 5%: $20.00
Buy out at 7.5% $30.00
Buy out at 10% $40.00
3M tons at $15,000 per ton gives us $45B In Situe
Buy out at 5%: $37.50
Buy out at 7.5%: $56.25
Buy out at 10%: $75.00
And in a dream scenario where we get nuclear grade...
3M tons at $30,000 per ton gives us $90B In Situe
Buy out at 5%: $75
Buy out at 7.5%: $112
Buy out at 10%: $150
The main point of this exercise for me was not how high the take over price could be but rather that our downside is non existent in a take over situation. Our current share price is a joke when we look at the upside potential.
So although these in between NR periods are difficult to watch, keeping your eye on prize which is only a few weeks/months away is the key here. Patience will be heavily rewarded IMO.
For the bashers, I will not bother responding to your comments. Any serious investor can pm me and I would be happy to chat. Cheers and...
Wake me up at $20