Link to full SCP Equity Research note here:
Today’s Kasiya graphite testwork demonstrates that Sovereign Metal’s (AIM: SVML, ASX: SVM) Kasiya’s coarse graphite product has the requisite characteristics for use in refractory applications. This includes low weight loss at temperature, low oxidation and high threshold temperature for oxidation, and low impurities. The PFS assumed one graphite product but today’s results indicate that course and fine flake products could be options, noting higher pricing for courser flake applications. Although Kasiya’s economics are driven by rutile, it will also be the largest graphite producer outside China per the PFS which gives the project strategic value in both titanium and graphite, and it’s graphite size distribution is attractively distributed across size fractions.
Today we maintain our BUY rating and our A$1.65/sh price target based on 0.6x NAV-10% and a LT US$1,400/t rutile and US$1,200/t graphite concentrate price
