PETER WRIGHT BASS METALS
ASX-listed junior Bass Metals is in the final stages of completing stage 1 optimisation work at its flagship Graphmada mine in Madagascar that will boost graphite production to 6000 tonnes per annum. On the back of this recent success, Bass Metals executive director Peter Wright spoke with Cameron Drummond about the company’s next step – fast-tracking development of its Millie’s Reward lithium project.
Q. What is your role at Bass Metals?
I am an executive director with a focus on corporate affairs, covering capital markets, investor engagement, corporate strategy and deal structuring.
The last two years has seen us fund our project solely from equity markets, which while more arduous than negotiating a debt piece, has fortuitously left us with zero debt and a near competed 100 per cent owned asset.
The corporate strategy from the outset has been to establish ourselves as a mid-cap producer of industrial mineral concentrates, via a pathway of least capital intensity.
Q. How is the company’s flagship Graphmada project tracking?
Graphmada is coming along well. Bass Metals chief executive Tim McManus and the team have done an outstanding job over the past two years to conceive and execute our strategy on budget.
In parallel we have a highly prospective portfolio of exploration assets we are progressing. We as a team are excited as to what lies ahead for our valued shareholders over the next few years.
We are on track to establish stage 1 production of 6000 tonnes per annum (tpa) of high value graphite concentrates, before stage 2 (20,000tpa in 2019 we think), in parallel with growing our resource inventory.
Q. What are the future plans for the Millie’s Reward lithium play, and what needs to fall into place to accelerate the project?
We are looking to establish a lithium resource at Millie’s reward. Clearly [with any] pre drilling [project], we have limited understanding on what lies beneath, however at surface I think it’s hard to find a more compelling surface signature than what we have encountered to date at Millie’s.
We plan to be drilling next year post a comprehensive field program now being undertaken.
Q. What role will strategic materials have in emerging markets?
Notwithstanding some of the enthusiasm that at times has been misplaced for both commodities, the underlying thematic is highly valid.
With lithium in particular, I find it hard to see that market being balanced over the next seven to eight years.
From my perspective there will be an enduring buoyancy in lithium prices in particular.
Countries are legislating against internal combustion engines, [and] major global automotive companies are stating they are moving to predominantly lithium ion battery service offerings over the next five to 10 years.
I struggle to see where the supply comes from to balance this demand.
This subsequently affects graphite markets which is the key component of the anode material in the battery. In particular, smaller micron flake market segments within the graphite complex are going to enjoy a material change in demand.
Q. What factors must mining juniors assess when developing these projects?
At the highest level, is it plausible that the company itself or a larger company could develop the project in question to a profitable mine?
As an additional tool is the project reasonably robust over cycle, as we all know commodity markets are inherently volatile?
I’ve always taken the 10 year price low for the underlying commodity, and applied this to the financial model and if this is still generating a reasonable provisional net present value (NPV) you have a basis for proceeding.
We selected Graphmada as it gave us a chance, after some hard work, to establish profitable cash flows.
We identified the value in existing infrastructure, the established logistics and customer base, the potential to add to the resource inventory, and that we were inheriting some significant operational experience directly applicable to the ore body.
We were firmly of the view we were buying the asset at the bottom of the cycle; this was a key factor.
Q. What is the best piece of career advice you have been given?
That’s hard to answer. It’s not so much an issue of direct advice received, but I have been lucky enough to work in close proximity to several people in the resources sector over my career.
These people have provided a great example of how to approach things, namely Stephen Bizzell (Bizzell Capital Partners) and James Brown and Paul Mantell at Altura Mining.
“With lithium in particular, I find it hard to see that market being balanced over the next seven to eight years.”