Bass Metals Ltd (ASX:BSM) provides an update on its Madagascar Graphite Mine


by Carolyn Herbert

Transcription of Finance News Network interview with Bass Metals Limited (ASX:BSM) CEO, Tim McManus

Carolyn Herbert: Hello, I’m Carolyn Herbert from the Finance News Network. Joining me from Australia’s only current graphite producer, Bass Metals Limited (ASX:BSM) is CEO, Tim McManus. Tim, welcome to FNN.

Tim McManus: Thank you.

Carolyn Herbert: Can you start by giving us an introduction to Bass Metals?

Tim McManus: Bass is an Australian listed company. We most recently bought the Graphmada graphite mine in Madagascar. We have a market cap of about $16 million to $18 million, and we feel we’ve just started our journey in the graphite space. Most importantly, we’re the only producer of graphite on the ASX and we’re looking forward to expanding on that production.

Carolyn Herbert: Now to your Graphmada graphite mine, what’s the size of the resource and what’s taking place?

Tim McManus: Graphmada is located in Madagascar. It has 5.7 million tonnes at 4.12 per cent total graphite content; we’re looking to expand on that. We have some drilling proposed for later this year. We have a 6,000 tonne per annum plant, and all the associated infrastructure with that. But at the moment it’s not running at its nameplate capacity, so it’s running at about 3,000 tonnes per annum. So we look to invest some capital, get that up and running and then expand into the market from there.

Carolyn Herbert: What are the key milestones and expansion plans?

Tim McManus: We have two clear projects for the company. One is an operational improvement project where we’ll invest money into existing infrastructure, improve our recoveries in our grade. The second project is an expansion project where we’ll build an additional plant, take our capacity up to 20,000-25,000 tonnes per annum, do a fair amount of drilling to find the resource. With mining permits already in place, and there for 40 years, we can produce enough graphite for the long term.

Carolyn Herbert: What are the economics of the project?

Tim McManus: This is the opportunity for Bass – we bought a breakeven project. It makes enough money to wash its face, as some would say. And then we’re looking to invest some capital to increase that production, expand into different markets and then build from there.

Carolyn Herbert: Where will production go and what markets are you selling into?

Tim McManus: At the moment we’re selling into the US market, India and Europe. We sold about 1,500 tonnes last year. We’re looking to increase that through to the nameplate capacity as I mentioned – to 6,000 tonnes. And then expand on that to take us to 20,000 tonnes. But the main two markets that we’re looking to really leverage off is the traditional market and refractories, and then the expandable graphite market. The battery market for us is a great opportunity, but that’s down the track. We want to leverage off traditional markets at the moment.

Carolyn Herbert: Now to finances, you recently completed a capital raising. How much did you raise and where will the funds go?

Tim McManus: We recently raised just over $7 million. A good portion of that is being spent at the moment, expanding and improving current production. We’ll look to spend probably about $0.5 million on drilling, starting in October and expanding our resource. And then longer term, we’ll look to use some of that money to develop our expansion projects, and then seek investment for that capital investment.

Carolyn Herbert: What are your financials targets for this financial year?

Tim McManus: This year we’re looking to continue to breakeven at the mine. And then expand on our production and become cash flow positive. For us that’s very much around improving recoveries in the grade, through some moderate capital investment in the existing plant. So that’s our main target. We’re on track so far. We’ve already improved our recovery in our grades. We’re looking to see that become more consistent, and then develop our relationships in the market for that.

Carolyn Herbert: Finally Tim. Where would you like to see the company 12 month’s from now, and over the longer term?

Tim McManus: We’d like our expansion project to be well in progress, looking to almost seek construction approvals and finance. We think our existing mine will be at a cash flow positive state; making approximately a couple of million dollars a year, at the 6,000 tonne per annum rate. And then the great opportunity to springboard for us is to build off that into the growing markets, like expandable graphite and batteries.

Carolyn Herbert: Tim McManus, thanks for the introduction to Bass Metals.

Tim McManus: Thanks very much for your time.


Carolyn Herbert

Finance News Network
Carolyn joined FNN in August 2015 as the Head of News and also presented the Market at Midday and the Market Wrap. With more than five years of broadcast journalism experience, Carolyn has worked as a finance anchor on the Sky News Business channel and as an anchor and reporter for ABC News. She is also a qualified corporate lawyer specialising in IPOs, takeovers and mergers and acquisitions.