Nice progress for NEXT. They have moved forward without a plan for a 200,000 ton a year anode plant in the middle of nowhere. How dare them.
Sir Mick Davis and Craig Scherba's NextSource Materials Inc. (NEXT) closed unchanged at 60 cents on 25,000 shares. The company has a new president and CEO, as Hanre Rossouw has moved into the corner office. He replaced Mr. Scherba, who revealed the plan in May. It was an amicable move apparently, as Mr. Scherba is carrying on with the company as chief development officer -- a bespoke position that will see him "focus on developing strategy, managing offtake negotiations and expanding the company's [original equipment manufacturer] relationships globally."
NextSource, Mr. Scherba, Mr. Rossouw and Sir Mick rhapsodize in unison, "is at a pivotal point in its development." The company has just shipped its first commercial consignment of graphite concentrate, generating its first income from sales to United States and European customers. "The rapid advancement of its build-out strategy for battery anode facilities and the bolstering of the management team through recent appointments further underscore the company's commitment to deliver on its next phase of growth," they enthuse.
The concentrate is coming from NextSource's small-scale graphite mine at Molo, in Madagascar, but the company has much bigger plans for the operation. Molo is currently rated for production of 17,000 tonnes per year, but a proposed expansion would boost it to 150,000 tonnes per year. That will not come cheaply, as a feasibility study a year ago put the capital cost of the expansion at $161.7-million (U.S.), with another $25.2-million (U.S.) needed for working capital.
Therefore, Mr. Rossouw and his crew will have to raise nearly $100-million (U.S.) to achieve the expansion. The good news is that they have a promotable bottom line to tout: The feasibility study projected an internal rate of return at a healthy 29 per cent and the discounted net present value was $370-million (U.S.) after taxes.
Mr. Rossouw does appear to have the jargon down pat: "The vision to become a global leader in sustainable battery materials is unchanged, with the key priority being the successful ramp-up of Molo," he applauded, noting that he "will continue to collaborate closely with all our strategic partners to capture the benefits of our shared aspiration."