Here are some excerpts re his top picks:
“My view with graphite is to pick the top tier players with quality resources and low costs of production. My top picks right now are Syrah Resources and Mason Graphite. The other near term producers such as Kibaran Resources and SRG Graphite can also do well. For speculative graphite plays with higher risk and reward I like Triton Minerals and Nouveau Monde Graphite.”
Disclosure: I am/we are long SYRAH RESOURCES (ASX:SYR), KIBARAN RESOURCES (ASX:KNL), Triton Minerals [ASX:TON].
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I find the author’s comments about TON having “higher risk and reward” than KNL (among several others mentioned in the above excerpt) rather interesting, especially when you consider TON has a MCAP of ~$60m and KNL has a MCAP of <$40m. From a technical standpoint KNL is more derisked than TON, so in this respect I definitely agree with the author on the “higher risk” comment. However, I think the geo-political risk priced in by the market to KNL far exceeds that of Mozambique - based on the current sentiment towards and state of play in Tanzania. My point: I agree that TON is a higher risk investment than KNL. IMO the market has disproportionately priced in the geo-political risk in Tanzania compared with the technical and geo-political risk (in Mozambique) priced into TON.
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