ASX: SGA - Sarytogan Graphite
Sarytogan Graphite: Highest grade graphite reserve on the planet!
Sarytogan Graphite Managing Director Sean Gregory on 6PR Bulls N' Bears Report
ASX-listed Sarytogan Graphite Managing Director Sean Gregory talks to Matt Birney on Bulls N’ Bears about Sarytogan’s definitive feasibility study on its monster graphite play with a 50 plus year mine life.
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Sarytogan Graphite is sitting on a monster graphite deposit in central Kazakhstan — and graphite is the stuff that goes into the anode of every lithium-ion battery on the planet and it has an almost endless list of industrial uses. Sarytogan has never been short of grade or tonnes. What it hasn’t had is a bankable set of numbers to put against them — that is until recently - with a definitive feasibility study now on the street.
RADIO INTERVIEW - TRANSCRIPT
Matt Birney - Welcome to Bulls N' Bears, brought to you today by Kazakhstan graphite developer Sarytogan Graphite.
Matt Birney - ASX code SGA
Matt Birney - I'm Matt Birney and I'm joined now by the Managing Director of Sarytogan Graphite, Sean Gregory.
Matt Birney - Hi, Sean.
Sean Gregory - Hi, Matt.
Matt Birney - Okay, so Sarytogan Graphite is sitting in a monster graphite deposit in central Kazakhstan and graphite is the stuff that goes into the anode of every lithium battery on the planet. And it has an almost endless list of industrial uses. Sarytogan has never been short of grade or tons. What it hasn't had is a bankable set of feasibility numbers to put against them until now, that is, with a definitive feasibility study now on the street.
Matt Birney - All right, Sean, let's get into this DFS. It has given you a bigger ore reserve. What is that ore reserve and how much of your resource does it actually chew through?
Sean Gregory - The ore reserve stands at 14.5 million tons at 29% TGC and that includes 2.5 million tons of proved reserve. Now, all of that is sufficient for 50 years of mining and it only consumes 4% of our giant mineral resource which stands at 225 million tons at 29% TGC.
Matt Birney - Hmm, that seems like a big grade. Where does that fit in with other mines around the world?
Sean Gregory - Well, in fact, Matt, it is the world's highest grade JORC resource. Typically, if we look around the world, there's a big mine owned by another Australian company Syrah Resources in Madagascar. They're about half the grade, 15%, we're 30. But more typically, most of the other hopefuls are around 5 to 10%. So that really does give us a good springboard.
Matt Birney - All right, let's get into those DFS numbers. Firstly, what will it cost to build this project?
Sean Gregory - The capital number from the DFS is US $80.5 million.
Matt Birney - And the expected internal rate of return?
Sean Gregory - 19.8%.
Matt Birney - What will it cost you to produce a ton of graphite and how much do you expect to sell that ton for?
Sean Gregory - The cost of production is $364 per ton and at an average selling price of $805 per ton, that gives us an EBITA margin of 51%.
Matt Birney - All right, so 50 plus year mine life. What's the net present value of all of the profits of this project back into today's money?
Sean Gregory - Yeah, that's coming out at US $133 million or in Aussie dollar terms, $190 million.
Matt Birney - Who actually buys this stuff? Give me the product split.
Sean Gregory - Look, we'll be selling some of this material directly as concentrate and that goes into markets such as drilling fluids, lubricants, friction products like brakes, it goes into the foundry market and also as a recarburizer in iron and steel making. But then the real exciting part of our business is to take some of that production downstream. This is not subject to the DFS, but an earlier PFS showed that we can make ultra high purity fines up to five nines purity and spherical graphite for lithium ion batteries. And there's still about $524 million Aussie dollars of NPV on the table left over from that pre feasibility study. So that becomes our next step.
Matt Birney - Sean Gregory from Sarytogan Graphite
Matt Birney - Thanks for joining me on Bulls N' Bears and remember, we're only here to give you information not advice which you should of course seek independently.
Matt Birney - I'm Matt Birney and this is Bulls N' Bears.
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