Graphite is one of the important minerals which is widely used directly and indirectly by the global population. There are several graphite manufacturers based in Australia with manufacturing plants. The companies process raw graphite and convert it to end products as per demand. There are few graphite players who are exploring new applications of graphite in the automotive battery segment. Let’s have a look at the following graphite players.
Syrah Resources Limited
Syrah Resources Limited (ASX: SYR) operates in mining and exploration activities primarily in graphite and has a production facility in Mozambique. The company also engages in selling and marketing of natural graphite flakes, high quality graphite etc. SYR is also involved in developing Battery Anode Material (BAM) facility in the USA.
Financial highlights for the half year period ended on 30 June 2019: SYR reported its results wherein the company posted a revenue of US$46.85 million and a loss after tax of US$81.428 million as compared to a loss after tax of US$8.33 million in previous corresponding period. The company reported cash and cash equivalents at US$64.68 million, total assets at US$420.47 million and net assets at US$380.41 million. The company commenced its first integrated natural graphite BAM facility outside China.
H1FY19 Financial highlights (Source: Company’s Reports)
Outlook: The Management is expecting higher growth of graphite aided by growing Li-ion battery demand from Electric Vehicle segment which is expected to grow at a CAGR >30% in 2019 – 2030. Again, the share of commercial vehicle within the auto industry is expected to increase in coming years. The above scenario will drive higher demand of several minerals like Graphite, Nickel, Lithium, Cobalt and Aluminum. The company is expected to produce more than 150kt of graphite in 2019.
Stock update: The stock of SYR closed at $0.505, down 2.885% as on 27 September 2019. The market capitalization of the stock stands at $214.95 million and total shares outstanding at 413.37 million. The stock has generated negative returns of 37.72% and 50.15% during last three months and six months, respectively.
Black Rock Mining Limited
Black Rock Mining Limited (ASX: BKT) is engaged in metal and mining activities and is also involved in exploration of minerals like graphite across the region of Mahenge of Tanzania (with 100% interest). The above project has a JORC compliant Mineral Resource Estimate of 211.9 million tonnes at 7.8% TGC for 16.6 million tonnes of contained graphite. It also has Ore Reserves of 70 million tonnes at 8.5% TGC
Location of Mahenge Graphite Project (Source: Company’s Reports)
Recently, with a press release, BKT announced that Mr. John de Vries was promoted to Managing Director from his current post Chief Executive Officer.
Financial highlights for the year ended on 30 June 2019: BKT reported full year financial reports for FY19 wherein the company posted revenue of $0.008 million as compared to $0.024 million in FY18. It reported loss after tax of $2.86 million as compared to loss after tax of $2.053 million during last financial year. Cash and cash equivalents were reported at $1.907 million while total assets stood at $23.1 million and net assets at $22.41 million as on 30 June 2019. During the year cash outflow from investing activities stood at $3.22 million.
Outlook: The Management expects that demand for energy storage and expanded applications is likely to double volumes over the period of next ten years on account of clean production, a shift towards electric vehicles and batteries and growing opportunities in flake segments.
Stock update: The stock of BKT closed at $0.062, down 3.125% as on 27 September 2019. The market capitalization of the stock stands at $39.84 million while the total shares outstanding at 622.55 million. The stock has generated negative returns of 28.74% and 4.62% during the last three months and six months, respectively.
Graphex Mining Limited
Graphex Mining Limited (ASX: GPX) operates in exploration and mining activities and is involved in the construction and development activities of the Chilalo Graphite Project in Tanzania.
Recently, GPX has informed one of its Non-Executive Director, Grant Davey, has resigned effective as on 25 September 2019.
Key Performance highlights for the year ended 30 June 2019: GPX reported a loss after tax of $8.05 million as compared to a loss of $4.11 million in FY18. Exploration and evaluation expenses stood at $4.23 million as compared to $0.95 million in the year-ago period. The company reported corporate and administration expenses & business development and marketing expenses at $1.29 million and $1.38 million, respectively. The company reported cash and cash equivalents at $1.26 million, while total assets of the company stood at $6.69 million and net assets at $0.20 million as on 30 June 2019. During October 2018, BKT entered into a Loan Note Subscription Agreement to raise US$5 million by issuing secured Interim Loan Notes. The above fund will be utilized for development of the Chilalo Project.
FY19 Financial Highlights (Source: Company Reports)
Outlook: The company is looking to be a supplier of coarse flake graphite of premium quality with exceptional expansion characteristics. BKT has targeted for expansion across the market for graphite, which among many other applications, is ideally suited for manufacture of high-value graphite foils and flame-retardant materials.
Stock update: The stock of GPX closed at $0.175, down 7.895% as on 27 September 2019. The market capitalization of the stock stands at $19.12 million while the total shares outstanding of the company stands at 100.65 million. The stock has generated negative returns of 30% and 16.67% during the last three months and six months, respectively.
Magnis Energy Technologies Ltd
Magnis Energy Technologies Ltd (ASX: MNS) deals in graphite exploration. The company produces graphite in its Nachu Graphite Project in Tanzania.
Recently MNS announced that it has secured $8 million funding from Negma Group based in Middle East. The above group will invest in the company for a period of 12 months and will have another option to invest an additional $4 million. The shares will be issued in monthly tranches based on a ten-day VWAP along with 8% discount.
Performance Highlights for the quarter ended 30 June 2019: The company issued quarterly cash flow statement wherein, it reported that $1.139 million were used for operating activities, $0.843 million were used in investing activities while reported Cash and cash equivalents were at $1.876 million as on of 30 June 2019. The company reported that oxide material that was previously stockpiled for later batch processing at end of mine life, can now be processed continuously. This translates into approximately 10% reduction of the volume of oxide material entering the process stream and reduces re-handling costs.
Outlook: The company has provided guidance of estimated total cash outflow for the next quarter at $1.521 million including exploration and evaluation costs at $0.339 million, staff costs at $0.470 million and administrative costs at $0.712 million.
Estimated Cashflow for Q1FY20 (Source: Company Reports)
Stock update: The stock of MNS closed at $0.185, up 2.778% as on 27 September 2019. The market capitalization of the stock stands at $110 million including the total shares outstanding of the company at 611.14 million. The stock has generated return of 5.71% and -27.45% during the last three months and six months, respectively.
Battery Minerals Limited
Battery Minerals Limited (ASX: BAT) operates in mining and exploration of graphite and is also associated with downstream opportunities in Battery mineral segment. The company has two graphite projects namely Balama Central, Montepuez in Mozambique.
Location of projects of Battery Minerals Limited
Key Operational Highlights for the first half-year ended 30 June 2019: The company reported a loss of $20.545 million as compared to a loss of $3.652 million in the year-ago period. During the half-year, the company reported impairment of mine development costs at $18.04 million. The company reported cash and cash equivalents at $6.83 million, total assets at $30.1 million, while net assets at $28.89 million. BAT reported net cash outflow from operating activities at $1.91 million, while cash used in investing activities stood at $3.33 million and net cash inflow from financing activities stood at $4.78 million.
Stock update: The stock of BAT closed at $0.009, with no change over the previous close as on 27 September 2019. The market capitalization of the stock stands at $11.86 million and the total shares outstanding of the company stands at 1.32 billion. The stock has generated negative returns of 35.71% and 70.97% during the last three months and six months, respectively.
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