Replies to post #13228 on Nextsource Materials Inc (NSRCF)

[riverrock]

AK Fish, they already approved the reverse split, but it is only good for one year after the December 19, 2017 meeting. I hope that they let it expire and then later under certain circumstances allow a reverse split on a much lower basis than those voted for at the annual meeting.

I believe that putting in a full plant with annual graphite concentrate production of 53,000 tonne would be a major problem because of ENZR's low price and its large number of shares. Doing the reverse split in such a situation would be a mistake and hurt many shareholders. Please see the paragraph about Largo Resources at the end of this post.
 
In every case they should complete the staged development plan without a reverse split, even if they have to issue some further shares for some of the money required for the staged development plan . As we all know many off-takers attempt to pay the smallest price possible for the concentrates. The staged development plan should allow ENZR to provide the best of the various types of graphite at equitable prices.
 
When the staged development plan is satisfactorily completed ENZR might consider a maximum, 1 for 3 share reverse split and possibly form a JV to further lower its cost of the projected final plant.
 
With the life of ENZR's proven and probable reserve at 26 years giving graphite concentrate production at 53,000 tonne annually its easy to see that kicking production up to 106,000 tonne annually would still allow for a mine life of 13 years.
Additionally conversion of the large measured and indicated resource to proven and probable would extend Molo's mine life considerably. This before their other graphite properties on Madagascar are considered.
 
A Joint Venture concerning Molo's graphite might be formed with their present Institutional Shareholders who would surrender their shares to ENZR who will hold them in it's Treasury for possible later development. This would lower ENZR's float and the cost to build the full plant which would be shared with the JV partner.
 
About Largo Resources
When considering reverse splits in the resources sector one should look at Largo Resources who presently has a good ferro-vanadium mine in production and did a 1 for 10 reverse split in October of 2014. Which allowed Largo's then 1,092,627,305 Common Shares to be reduced to 109,262,730 Common Shares. Largo had good initial backing and an off-take in place with commodities giant Glencore. Now after 2¼ years Largo has 437.8 million shares, mainly because the ferro- vanadium price has yet to fully cooperate.

[Juiceisloose]

The RS has already been approved along with a company name and ticker change. They will probably RS later in the year right around the new test mine is operational this way they at least have something when they do the RS. If they don't have anything going when they do the RS the price will surely drop again and go against what they are trying to achieve. In my opinion a RS does not hurt anything as they are obviously trying to achieve a higher price point for the stock. With less shares the PPS will be higher considering the market cap continues to reflect company worth. As of now ENZR only has debt with no revenue. So once they can visually record product(via the test mine), market placement of product and then cash value(market for large flake graphite already showing real strong demand). The test mine proves the ability to produce and adds value to the future plans therefore increasing the market cap based upon future production possibilities. SO the RS does not hurt ENZR if it is performed at the right time. Considering they plan to have the test mine operational before the end of the year they have plenty of time to execute the plan of RS and ticker change. But I believe it will happen and most likely hopefully before the test mine goes into production as I am hoping to pick up some inexpensive shares. Then hold long term as the company is finally after many years actually moving itself into a billion dollar market cap IMO ENZR