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Flinders Resources Limited (TSXV:FDR) announced operational and corporate plans for the rest of year 2015, which include completing Stage 1 of plant and mine commissioning as well as graphite production at Woxna, and the current scheduled summer maintenance shutdown to reduce expenditure to less than C$150,000 a month and maintain the Company’s competitive advantage.
As quoted in the press release,
Key points of this strategy include:
- Completion of Stage 1 plant and mine commissioning, and graphite production at the Woxna operation in Sweden;
- Implementing the next stage of the Company’s growth strategy, to position Flinders as a supplier of choice to the rapidly expanding and game changing lithium ion battery energy storage market;
- Conserving the Company’s strong cash position of C$4M, in the face of four year lows in natural flake graphite prices. Graphite production will be restricted until profit margins improve;
- Maintaining the Company’s competitive advantage by continuing to run the Woxna operation on a “production-ready” basis.
… Flinders is the only western producer of natural flake graphite with a fully constructed, permitted and producing plant and mine. Together with no debt and more than C$4M in cash, the Company is well positioned to concentrate its resources on research to produce high purity graphite, and initiate relevant permitting. With the knowledge gained from operating the Woxna plant for the last 10 months the Company has proven it can produce graphite competitively to customer specifications. The plant is currently undergoing a scheduled summer maintenance shutdown, and will not commence meaningful production until market conditions improve. This allows Flinders to reduce its expenditure to less than C$150,000 a month and maintain the Company’s competitive advantage by continuing to run the Woxna operation on a “production-ready” basis.
The Company also advises that effective June 22, 2015, Ms Seema Sindwani resigned from her position to oversee the Investor Relations Program for the Company. The Company will manage Investor Relations in-house moving forward.
Flinders Resources President and CEO, Blair Way, said:
The first stage of our growth strategy is now complete, which has uniquely placed Flinders as the only western producer of natural flake graphite. We are now in a strong position to implement the second stage, to place the Company as a supplier of choice for the rapidly expanding and game changing lithium ion battery energy storage. The Company has been working on optimizing a flow sheet to produce high purity graphite that was substantially developed in the early 2000’s by the previous owner of the Woxna project, as well negotiating with existing high-purity technological providers. We will provide further information as the high purity project progresses.
Despite the Woxna project producing graphite to grade and recovery specifications at competitive cash costs, declining global flake graphite demand during 2015 has pushed prices to a four year low of less than US$700/tonne. Given these weakening conditions, the Board has chosen to reduce production and only supply larger volumes when improved graphite prices return. The plant shall be maintained on a production-ready basis and working capital conserved.
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