RE: Twitter22 May 2024 20:31
Reserved,
That’s a very useful comparison, thanks for posting.
What I was struck with on the recent interview with MR was the complete and utter change of direction from being your a graphite concentrate producer to processing downstream SPG. Previously he had suggested that being a producer of concentrate would yield very good returns for the company, and clearly this is reflected by the PFS. However, MR was clearly excited about the prospect of doing something different and addressing an area in which almost no western firms operate. For those that weren’t on the call, he mentioned that producing graphite concentrate isn’t the issue, its downstream SPG processing and refining the concentrate into something that can be used within EV batteries that is causing the west a major head ache. As such, this is an area that BRES need to get involved in.
Clearly, BRES don’t have the knowledge and experience of being able to execute downstream SPG without a joint venture, again, referenced on the call. However, he seemed to think that processing downstream SPG would be a game changer for BRES, which for me is very exciting because the NPV is huge at present (under PFS), so area I am keen to find out more on.
A final point is that the all in cost of producing graphite concentrate is likely to drop from around $500 per tonne to just over $400 per tonne. This again is likely to have a material impact on the already impressive NPV and return profile of the project. So even if BRES start with a 5k tonne per annum plant (lets say for the first year), then this would still yield a huge return (given the current market cap.
Say cost per tonne to BRES: $400
Selling price per tonne: $1,100
Net return per tonne: $700
Net return x5k tonnes: $3.5m
BRES Market Cap: $15m
Return % vs Market Cap: 23.3%