Stocks’ Details

Syrah Resources Ltd (ASX: SYR)

Progressive Growth: Recently, Syrah announced its first production of bagged saleable fines graphite from the Balama Project in Mozambique. There were few developments reported that included ore commissioning of coarse flake and fine flake circuits that have been successfully completed. Its first shipment of coarse flake was scheduled to depart on 31 December 2017. With the successful completion of initial commissioning activities for both the coarse flakes and fines circuits, the group’s operational focus has shifted to optimisation and progressive ramp-up. Demobilisation of the construction team also continues, and the project will be fully operational by January 2018. It was also observed that the fine graphite produced is within the target which is in excess of 95% fixed carbon and has progressed according to the plan with both grade and particular size distribution which is within the specification. SYR is also planning to install the attrition cells by early New Year. Recently, it signed a binding sales agreement with Zhanjiang Juxin New Energy Materials Co. Ltd and this agreement is for 20,000 tonnes of natural graphite from the Balama operations in 2018 and it signifies import of Balama graphite into the leading geographical market for natural graphite and illustrates the demand for Syrah’s natural graphite which acts as a baseload material for battery anode applications. SYR has updated its Securities Trading Policy and it is expected that its earnings growth has been expected to surpass the low risk saving rate. It has a strong balance sheet and the level of debt as compared to the net worth has been reduced over the past 5 years. It was also seen that the number of shares bought are more than sold in past few months. Exploration of other potential commercial relationships are also underway and in fact testing, benchmarking and product development with respect to Cadenza will continue this year as well. In last six months, the stock prices have climbed up by all most 61%, so by looking at the progressive growth we give a “Hold” recommendation on the stock at the current price $4.51
 

Company Overview (Source: Company Reports)
               

Lanka Graphite Ltd (ASX: LGR)

Efforts on transformation from Junior Exploration Graphite Company to an Operational Progressive Company: Lanka has incredibly valuable strategic partners for graphite and Graphene Related Research and Development and it is currently applying for its second AML (Artisanal Mining License) to ramp up production of up to 40 tons per month. After the rant of first AML, the company commenced its small-scale production at the applied Exploration Licenses. The company is also in the discussions with the numerous key members of the Sri Lanka government to continue on this front which benefits not only the company but brings infrastructure upgradation leading to overall economic development. The company also signed a Heads of Agreement with an American-based company Global Graphene Group (G3), which is the largest graphene producer in the world. LGR is planning to set up value addition plant in Sri Lanka which will help in supplying to high tech energy industry and graphene producers. Lanka anticipates that production of graphite from near-surface and exposed vein graphite within the target area of EL307 is also expected to start from early Q1 2018 with volumes ramping up to at least 20 tonnes per month within six months of commencement. AML is a high grade low cost project with minimal capex and early production is expected to commence and is expected to produce a minimum of 2000 tonne per annum to make the company profitable in short and long term. Given the early stages, we believe it will be prudent to watch this player and put an “Expensive” recommendation at the current price of $0.053
 

Talga Resources Ltd (ASX: TLG)

Growth expected in the battery supply chain space: For Talga, 2017 was a transformative year as there were few developments like Graphene product business strategy got implemented, Cobalt projects got activated and expanded, and the group took the advantage of growth opportunities in EU battery sector. It was also observed that capital requirements were met for the planned activities by way of issuing equity and by gold asset sales. The share prices also got doubled over the year and the company’s market value exceeds the target. TLG owns 100% of a unique and large graphite source in tier 1 mining and technology material destination which is Sweden. It fully owns its test facility in Germany and it is accelerating its commercialisation process. It has high grade graphite deposits in the pipeline with the largest graphite resources in Europe. Talga also has in-house value-added product development capabilities which start with the internal prototype testing and followed by external validation with the end users. Talga is advancing higher performance coatings with graphene which will be an eco-friendly alternative to chromium, zinc and copper for giant global coatings market. JDA (Joint Development Agreement) with Chemetall, a global business unit of BASF Coatings Division has enabled Talga to co-develop and commercialise graphene-enhanced coatings. Talga is positioning to supply higher performance and lower cost conductive additives and materials for Li-ion and also alkaline batteries with the aim of more eco-friendly manufacturing. Its successful trial of thermally conductive concrete shows that it will create a fast growing and potentially bulk volume market. Recently, it announced that its wholly owned UK subsidiary, Talga Technologies Ltd has been successful in funding three applications under the UK Government Faraday Challenge battery development initiative and this funding is expected to be provided up to A$1.0 million as against A$1.5 million Talga’s budget over the period. We recommend to watch for potential positive catalysts for Talga and put an “Expensive” recommendation at the current price of $0.56
 

Catalysts for Growth Margins (Source: Company Reports)
 

Magnis Resources Ltd (ASX: MNS)

Diversification Strategy: Magnis had signed an MOU with WIN for a plant based in North Rhine Westfalia and it was agreed that Magnis will have the ownership and will provide anode materials and technology for the battery plant. It continued its diversification of its operations through ownership in the development of lithium-ion Gigafactories in the United States, Germany and Australia. The Company also identified multiple sources of graphite for the production of anode materials along with other speciality products. Lately, it also received strong interest from a number of parties which were looking to source high purity Super Jumbo and Jumbo flake graphite and also expects to be able to report on Binding Offtake Agreements. It secured the agreement with the European group World Plastik ve Petrokimya Sanayi ve Ticaret, a division of the World Group, for 25,000t p.a. of flake graphite consisting of 15,000t p.a. of Super Jumbo at 97-99% TGC purity and 10,000t p.a. of Jumbo at a purity of 97.5% - 99.5% TGC and this was sourced from the Nachu Project. It is expected that the earnings will grow significantly, and its cash and other assets cover its commitments; and by looking at the overall picture we recommend a “Speculative Buy” at the current price of $0.46
 

Argosy Minerals Ltd (ASX: AGY)

Rincon Lithium Project’s stage 2 development progress: Recently, Argosy announced further Stage 2 development progress for its Rincon Lithium Project located in the Lithium Triangle in Salta Province, Argentina, where the Company is conducting lithium brine pumping, entailing production into Stage 2 evaporation ponds and then commencement of natural solar evaporation to instigate the lithium brine concentration process. The Company also continued to progress construction of Stage 1 pilot plant, located at its fully owned industrial warehouse site. The Company is conducting two concurrent phases of drilling operations and is also conducting various laboratory analysis test-works on the resource exploration drilling samples and the results have been positive. The group had earlier announced that Qianyun has requested an extension to the confirmatory due diligence period due to time being taken for receipt (and in some cases translation, etc.) of certain documents by their lawyers (AGY entered into a binding investment and off-take agreements with this fast-growing Chinese battery company Qingdao Qianyun High-tech New Material Co. Ltd.). The stock price has moved up by 16% in past one month and the stock is trading at slightly higher levels.Given the scenario, we believe that the stock is “Expensive” at the current price of $0.26
 
 
Rincon Lithium Project (Source: Company Reports)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.