Woodburne Sq Share Discussion Threads

[marab] 20/3/2012 08:27

xcap - where did you see the RNS as it isn't showing up on Investigate yet and I do hate missing stuff. I've just tried to add STGR to my monitor and it worked and WSAG disappeared. Start of a new era my lads ushered in by the eagle eyed young xcap :))

[engelo] 20/3/2012 07:49

Stephanie_M: are you still with us??

[engelo] 20/3/2012 07:25

Thanks XCAP. Well that's a relief :-)

Edit: terse as usual. Next one should be more interesting...

[xcap] 20/3/2012 07:19

change of name RNS out, new ticker STGR

[marab] 18/3/2012 11:00

engelo - that youtube link is well worth viewing. Guess we should be looking for somewhere in the graphene business to invest in before it all kicks off. Let's hope we all make some cash before someone decides to see what happens when you link graphene to uranium.

[keya5000] 17/3/2012 20:56

Nice article Engelo, all the TSX plays are not in production at present or likely to be until late 2012.

So the likes of Northern Graphite could easily have mcaps of around £80m+ when they get to the same stage that we are at, if we end up with 30% its possible our share will be worth well over £20m.

Not an unrealistic scenario and perhaps very conservative if graphite stocks have a 'bubble'.

I honestly believe we should be 10p+ now, just needs some decent resource figures to be published in order for the market to wake up.

[engelo] 17/3/2012 20:10

Meanwhile back to graphite where the money's made.



Extract:

Graphene is exciting... but it's Lithium Ion Battery Demand that Will Drive the Next 3-5 years.

What makes this sector even more exciting is graphite demand is clearly tied to peak oil and gasoline prices over the next decade. The drive to alternative energy vehicles is the key link to many of these companies and their hopes to mine, be bought out or secure off take deals. Without this incremental demand coming online over the next 2- 5 years... this theme is dead. As gasoline prices continue to edge higher in the age of inflation, consumers will be forced to adopt affordable alternative fuel vehicles and adoption rates will be much higher than anticipated. Adoption rates are the wild card in the demand equation and could choke supply because of not enough of the right type of graphite is available. There is already limited synthetic graphite on the market and it costs well over $15,000/tonne and increasing as the price of oil increases.

Graphene will play a more important role in graphite demand from 5 to 15 years from now, while getting mines into production to support electric/hybrid vehicle mass production rollout over the next 3 years is the priority. Just from Tesla's Model X and S they could be selling 30,000 to 40,000 cars per year by 2014 which is a quarter of the total output of Northern Graphite. Tesla is designing power systems for other manufacturers as well. Every auto manufacturer is forced with the same choice and is going down the road of electric and hybrid vehicles. If gas prices go to over $5 a gallon in the US over the next 18 months, you will see much faster adoption rates than anyone anticipated.

Incremental demand for Lithium Ion batteries is expected to grow on average 25% a year. That is over 300,000 tonnes of large flake demand by 2020. Nuclear pebble bed reactors are expected to take up 400,000 tonnes of supply by 2020. While Li-Ion battery demand may be elastic and change accordingly to oil prices, pebble bed reactor demand is inelastic and the 400,000 tonnes needed per year is locked in stone unless all these reactors are cancelled now.

And then you have fuel cell technology which saw an emergence in graphite in the early 2000's with Ballard. Fuel cell technology has been long in developing and perfecting, but 10 years after the initial Ballard excitement, even fuel cells are a legitimate technology. Fuel cell technology could require the entire current 1.2Mt market for graphite!

This is just the start of a major bull market in a sector that didn't exist 18 months ago. At the end of this run 5 years from now, some of these stocks will have gone up 1,000% to 10,000% and be developing major graphite mines. If everything comes together like a once in a 100 year perfect storm... this could be 10 times bigger than anything we have seen in any materials sector since the the turn of the 19th century gold rushes Some say this is like the beginning of the Uranium boom while others say it is like the Lithium boom and still others want to compare it to the recent rare earth boom. I say it is better than any boom this millenium because this is a sector where it needs mines fast-tracked to construction for the next 5 to 10 years and depending on how technology plays out... Could need a lot of them. More mines than there currently are companies trading on the Venture market. This is a sector where building a mine isn't impossible, doesn't require the endless permits or $1B cap-ex that most large high value mines require. These projects are relatively cheap and still return cash flows that leave most $1B cap projects in envy.


This is a sector where there is real incremental demand from several angles and is a sector that has no companies and no major mines outside of China. It is also a sector where the largest mine in the industry is only 40,000 tonnes meaning there will be need for at least 10 to 20 to 30 new graphite mines outside of china over the next decade. That doesn't include the mines that will be depleted over this decade and need to be replaced as well like Timcal's Lac des Iles or the mines in China that are becoming less competitive. This is a sector where the returns are off the chart for the minimal dollars required. It is a sector where there is ton of excitement about chasing pencil lead. The fundamentals in this sector from mine to pencil suggest that the perfect storm is brewing in graphite and the early birds in this sector will get the worms.

Note... early birds and worms are plural.

Out of the 15 companies listed above... half may be mines in ten years. Those are odds that just don't happen very often in mining. So are these prices rises justified? Every single penny is justified and my gut tells me that this is just the beginning and graphite stocks will be in high demand all year for several years. Themes just don't come around like this very often. The last one was uranium 8 or 9 years ago and if projections are right, the graphite rush will make uranium in 2005/06 look like a blip.

There might not be another hot theme like this for another ten years. Don't hum and haw about graphite and watch these stocks go up. Join the party and make some money!

Christopher Skidmore

[engelo] 17/3/2012 18:34

Couple of graphene links from the Megagraphite site which has a lot of good stuff.

For those with a bit of time:

For those with 2 mins:

The utube link looks trivial but woke me up to the fact that they can add various other elements to the graphene lattice and still retain 1 atom thickness. Looks like a complete revolution in micro electronics.

[engelo] 17/3/2012 18:32

Jo-jo: yes! Let's hope so.

[jojo_jo] 17/3/2012 17:18

engelo, I 'm not sure what the order of play will be?
Either let Graphmada arrange their own funding via our friends at Consmin/PrivatBank, then pick up a further stake (say 15%) on already agreed terms at a later date, or exploit Graphmada's need (?) for finance to buy the additional stake fairly soon, on favourable terms. Arranging guaranteed finance would probably be enough to get the same excellent terms for the stake, which can be subsequently be taken up and paid for later this year. The fact that they're in no rush to sell the family silver implies the latter course has been pursued. Accordingly no fundraising/dilution necessary at StratMin for the forseeable future.
IMPO/DYOR.

Great David Attenborough program on this afternoon about Madagascar's rain forest monkeys. Must be one of the most densely forested areas in the world. It certainly explains the abundance of graphite. Income from graphite could alleviate the need to de-forest... so an eco-friendly investment too.

[engelo] 17/3/2012 13:59

Jo-jo: think you are on exactly the right lines (as usual). GS's attitude is (a) that he would have the final say in further advancing the Graphmada enterprise (which I agree he has now done) and (b) that any chief exec worth his salt has to be prepared to travel and in this case would HAVE TO get to know the co. at first hand.

Imo though stratmin don't have to fund Graphmada directly, the problem is at graphmada's level, which protects stratmin from fund raising/dilution as said before here. So imo we just have to know how to arrange the solution at Graphmada's level (from Consmin or wherever) which is what we are bringing to the party. In return we get our stake in graphmada on favourable terms.

BRDY is still looking a good investment monetarily (although completely opaque) but otoh is a bit of nuisance in that it couldn't be sold easily, at least until it divulges more about itself! Stratmin will know much more about BRDY than we do and maybe knowing it will bear fruit at some point are leaving it on the back burner. The silver stuff we can trust them on imo.

[jojo_jo] 17/3/2012 11:45

Although the subject wasn't broached precisely, I presume there was very good reason for the Madagascar visit (ie. more than just GS meeting the management down there). I bet documents were signed while they were there. They would want to tie down a decent size stake, say 30% - 45%, before the price and interest in graphite takes off. Judging from the original statement this was loosely agreed at the start. Graphmada may need some more cash soon for transportation etc, so hopefully the mechanism for increasing this stake, etc, has now been agreed in writing. As already noted, a lot of this could be funded from the sale of the BRDY/Silver stakes. Graphmada are contemplating a listing down the line, and could use the expertise we can provide. It could be valued at over £60m by that time, providing an attractive part-exit strategy for us and the current owners.

They may even have sniffed around other mines while they were there, or had a look at assets in mainland Africa.

An RNS is in the pipeline. It could well contain more than has been suggested.
Good reason to be pleased.
Jo.

IMPO/DYOR.

[gurp] 16/3/2012 20:32

yes many thanks for that report engelo, good reading
only doubt is the 64 shares you say you own!

[ro5enberg] 16/3/2012 18:38

Great work engelo.. Certainly provides me with an incentive to carry on buying more of these..

[sirraman] 16/3/2012 16:47

engelo...thanks for the update and taking the time to speak woth GS. It helps us all with the confidence in our investment here. Not a trader so here for the medium to longer term .....as imo best returns are gathered by picking up shares with such potential early and staying the course.

May add more if funds avail ..... :o)

[engelo] 16/3/2012 16:38

jojo: thanks. Absolutely technically incompetent so none of the above! Sometimes have prohlems reading my own writing, tho :{

[engelo] 16/3/2012 16:13

marab, xcap and others thanks. Amateur certainly: not gifted: rather GS is a good responder! We can all imagine how different other AIM MDs would be (if you could ever reach them) :-).

Was especially pleased by (a) apparently brilliant logistics picture at Graphmada, (b) to hear GS' referece to the share option mob. We all know those 'directors holdings' RNSs that turn out to be more jam for the boys.

[jojo_jo] 16/3/2012 16:10

Good stuff engelo. Thanks.
Do you use the answerphone recorder or hands free and shorthand!
Well planned questions too.

[xcap] 16/3/2012 15:59

BHR holding per digitalook

Consolidated Minerals Pte Limited 120,600,832 £12,361,58

approx 12%

[marab] 16/3/2012 15:55

engelo - cheers for the very detailed report. Would have taken me about 3 days to type that lot. Don't see anything there to take issue with and all sounds positive. Are you a professional interrogator or just a gifted amateur :)

xcap - I agree with you about the SP, longer term this could be a great investment especially, as you keep mentioning, the low MC here. Lots of room for growth. I am sure some will try and trade this for a few quid but is does look like the best way forward is to just buy and hold.

[xcap] 16/3/2012 15:42

don't give a toss where the share price ends up short term because JoJo I am getting the feeling this may well end up topping your £1 TP in 12-18 months!! imho

[xcap] 16/3/2012 15:37

so cool engelo, very well done, and yes completely reinforces what I had hoped for in GS. He is serious player and wants WSAG to become a serious company that will command respect based on the sound and carefully planned and strategic investments. The Graphmada deal just looks better and better - a possible listing chaps in 12-18 months?? and we may hold 40% plus of it at the time of listing!!
engelo thanks again!
edit: and yes you chaps engelo/marab/JoJo were right about dilution and leveraging off the subsidiaries and the banker billionaire :-))

[jojo_jo] 16/3/2012 14:59

Yes, I think we all talked about subsidiary companies raising their own finance (with our help), which minimises risk and maximises leverage. We have a Banker/Bank on tap too. All fits.
Invest at bargain prices based on bringing sales/marketing expertise and a funding source to the table. Good bargaining chips, eh!

IMPO/DYOR.

[marab] 16/3/2012 14:40

xcap - many thanks for finding the info. So many stocks - so little memory cells left :) Bit embarrassing though that I can't remember my own posts. I quote me from post 791

'An advantage of subsidiaries was that dilution could be absorbed at this level', my guess would be that WSAG will help the likes of Grafmada to raise cash where required. The beauty of that system would be that there will be no need for WSAG to put in any more cash unless they feel inclined to do so, and I would expect funding to be at a level that would enhance WSAG's share holding where possible. Obviously as the companies being targeted are likely to be close to production or about to ramp up production any investment cash at that point should add value to the WSAG holding.