PE­TER WRIGHT BASS MET­ALS

THE IN­TER­VIEW

The Australian Mining Review - - FRONT PAGE -

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.”

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