Giyani Metals – EMM.V Case Study

Giyani Metals EMM.V – formerly WDG.V Frankfurt:KT9 WKN:A2DUU8 OTC:CATPF

Case Study

This is an interesting near term premier high purity (99.9%) electrolytic manganese metal (EMM) producer – one of the few outside China. It should be noted that EMM.V chose their new ticker symbol to match the acronym for the product they plan to produce once the mine facility is built. Giyani plans to start producing (2020) 40,000Mt/yr of high purity EMM worth in the neighbourhood of $188,000,000 USD/yr (at current prices) with a mine life of 9+ yrs and an estimated CAPEX of under $100 million USD. And that’s just on ONE of their three known deposits. Add to that the fact that they are exploring the rest of their land package which has at least two additional known manganese outcrops. ➡️As they get closer to production the value of Giyani and its shares will obviously likely rise dramatically with each milestone achieved.

https://stockhouse.com/news/newswire/2019/02/13/manganese-forgotten-battery-metal-hidden-opportunity

https://m.miningweekly.com/article/manganese-poised-to-make-its-mark-as-ev-metal-2019-06-05/rep_id:3861

The latest Investor Presentation

https://giyanimetals.com/wp-content/uploads/2019/06/20190605-Giyani-Presentation-vsmall.pdf

Here’s how Giyani decided to take on the Kanye Basin Project written by Wajd Boubou company President.

http://flip.matrixgroupinc.net/cmmq/2018/winter/#/article/22/page/1-1

Some main highlights.

-Targeting 150,000 Mt run of mine producing 40,000 Mt of 99.9% electrolytic manganese metal next year at $4,700/Mt is $188,000,000 USD/yr. (FYI 99.7% is $2,000 USD/Mt these days =

– that’s the difference .2% makes) -DSO ( Direct Shipping Ore ) Project will make them cash positive THIS year.

– 9+ yr mine life for ONE of its deposits on on an 8,100 sq/km property in Botswana which is btw just slightly smaller than the size of Puerto Rico.

-The highest rated mining jurisdiction and voted least corrupt country for the last 22 years in Africa.

-4 hr drive from Johannesburg where machine shops and parts suppliers offer services to support mining operations.

-Property has a high exploration potential for extending mining operations significantly beyond 10yrs given the probability of exploiting other exceptionally high grade deposits.

-CAPEX for mine and processing plant build is expected to be approximately $100,000,000 USD or less.

-Simple mineralogy ( a huge advantage over most other projects outside of and especially increasingly inside China due to declining grade) means economic extraction and high margins.

-Hydro metallurgical processing is being tested at Dalhousie University Minerals Engineering Centre

– the same facility that TESLA has a signed partnership agreement with for battery materials research.

– Off take agreement signed with Traxys Africa Trading.

– SRK Consulting currently doing the PEA expected to be completed mid 2019

– Giyani currently in talks with multiple off take partners and EV and grid storage battery manufacturers and commodities traders including UMICORE, CATL, TRAXYS, and several others.

– The people steering this project are well qualified and serious about meeting or exceeding stated timelines as their goal. They are quite adamant about budgeting (they don’t waste money on a useless IR guy for examplei) and keeping dilution to a minimum. (This is KEY in any investment).

-Year over year battery grade manganese market demand forecast to increase into the foreseeable future.

This is a slightly dated but EXCELLENT video of an interview with Robin Birchall packed with information that is WELL worth closing your eyes and listening to at least twice. I’m not exaggerating. The PEA completion timeline mentioned in the video is now currently estimated to be very early in July. Otherwise very little has changed in their outlook.

http://www.commodity-tv.net/c/mid,39130,Precious_und_Battery_Metals_Summit_Zurich_November_2018/?v=298700

And a more recent video presentation with Robin.

https://t.co/KIByHt2i6O?ssr=true

Here’s some additional links of interest to provide some background that supports the investment case.

http://giyanimetals.com/wp-content/uploads/2018/10/Giyani_Oct2018-Final.pdf

https://www.proactiveinvestors.co.uk/companies/news/198187/giyani-metals-plans-to-obtain-premium-prices-for-its-manganese-in-the-battery-electric-vehicle-market-198187.html

From the Feb 2019 edition of 121 Group mining magazine The Assay.

https://view.publitas.com/the-assay/the-assay-technology-metals-digital-version/page/18-19

Here’s a “comparable” to Giyani Metals. Keep in mind Euro Manganese is about five to six months ahead of Giyani but…. let’s see how they compare….

http://www.gowebcasting.com/events/precious-metals-summit-conferences-llc/2018/11/05/giyani-metals-corp/play/stream/26731

Here’s what Canaccord says about Euro Manganese (EMN.V) who initiated coverage with a SPECULATIVE BUY rating on EMN, a company in the same industry as Giyani.

https://dgwa.org/wp-content/uploads/2019/02/CG-EMN.pdf

Very useful report to help understand the plan that the EMM team has for Giyani. This is what Giyani CEO Robin Birchall says are some of the key advantages that Giyani has over EMN.

1. Giyani does NOT need to calcine their ore because it’s in a naturally occurring oxide form.

2. Their leach tests show recoveries of 93%.

3. Their grade is almost 4 times higher than EMN’s.

4. Their contained Mn metal is about 1/3 of EMN’s in just their first deposit at K Hill. A second deposit (Otse) is expected to be similar but 30-50% larger than K Hill. ( In addition, they have a third, less developed but highly prospective, deposit at Lobatse on several thousand square kilometres of open ground yet to be explored on the Kanye Basin Project ). This unexplored ground has two known Mn occurrences that will be drilled this year boosting the potential for Giyani to well exceed that of EMNs’ resource size.

5. They have the same infrastructure as the Czech republic and considerably more favourable mining jurisdiction. This all leads to lower OPEX, much lower CAPEX and much higher margins due to grade and non-carbonate ores. Although Giyani is a few months behind EMN the processing plant will be CONSIDERABLY less complex, less expensive and faster to build.

All of this will have concrete numbers applied to them in the next few days as they are expecting to report their PEA very soon. If you speak to management they’ll give you clearer insight as to why the CAPEX and OPEX are expected to be much much lower than that of Euro Manganese.

This is some excellent background on the manganese sub sector and outlook. “Manganese-Based Materials for Battery MakingHigh-purity manganese sulphate (HP MnSO4) – MnSO4 is the main product used to make NMC cathodes for EVs. HP MnSO4 can be produced from different manganese products, but high purity EMM is preferred as the starting raw material. It is worth mentioning that the specifications of high purity EMM needed to produce HP MnSO4 at a competitive cost, are stricter than the standard EMM that is produced for the steel market. Standard EMM with 99.7% purity is currently trading at around $2,000/Mt. High purity EMM, however, is not traded publicly but contract prices are significantly higher than those of standard EMM.”

https://www.theassay.com/technology-metals-edition-insight/manganese-no-longer- just-an-input-on-steel/ And..

https://www.advancedsciencenews.com/dawn-of-the-post-lithium-era/

https://www.spglobal.com/marketintelligence/en/news-insights/trending/tlen19dlvfn1hc8qix7oxw2

Giyani Metals mentioned here.

https://www.theassay.com/technology-metals-edition-insight/investing-in-the-manganese-industry/

As mentioned above Giyani will be nicely cash flow positive once the K Hill Environmental Management Plan public review is completed and the DSO Project kicks off. Early indications are that this review process will be strongly positive. This will give them a hefty source of non-dilutive CASH to advance the de risking process towards production next year. Keep in mind the Mn ore sold during the DSO project is priced much differently than standard electrolytic manganese metal flake (EMM) and battery grade “high purity electrolytic manganese metal” with high purity EMM (HPEMM) being the main product Giyani will produce once the mine and plant goes into production next year. *[ For pricing reference to the product produced and sold to Traxys this summer from the DSO Project ONLY. Keep in mind this is just a quick and easy way to raise several million $ and is not the targeted product next year.

Regarding the pricing of manganese; the most common way of quoting prices of *ore* in the market is DMTU (dry metric tonne unit); usually for grades 34% and 41%. There are formulae to calculate prices of other grades based on those two price points. A DMTU is a unit of 10 Kg which is 1/100th of a tonne; therefore the price of a tonne of one “wet metric tonne” of manganese equals the DMTU price (from a recognized source like Metal Bulletin) for a given grade multiplied by the grade of the ore Example:DMTU price for 37% manganese according to Metal Bulletin these days is $5.75 So the price of one tonne of 37% manganese ore is 5.75*37= $212.75. The price of one tonne of 32% manganese ore is 5.75*32= $184 and so on. All of the above pricing is in US Dollars ]. Convertible loan from TRAXYS for one million dollars to start processing DSO stockpiles. To be processed over approx. 6 months for net revenues between $4-5 million. I believe we will see DSO revenues much higher than that but that is simply a matter of my own opinion.

http://giyanimetals.com/giyani-signs-term-sheet-for-convertible-loan-facility-and-marketing-agreement-with-traxys/

It’s important to highlight this section of this Jan 28, 2019 Traxys news release with respect to any loan conversion which would signal a massive vote of confidence in Giyani from a well established global commodities trading house. Watch for it. “The convertible facility will also bear interest at a rate equal to the aggregate of 10% and the US Dollar LIBOR per annum compounded quarterly and will mature 36 months from the date that all conditions precedent to draw down have been satisfied. The outstanding principal amount may be converted, in whole or in part, at the election of Traxys into common shares at a price per share equal to C$0.225. At the establishment of the convertible facility, Traxys will also receive 3,000,000 warrants all vesting immediately. Each of the warrants will be exercisable into one common share for a period of 36 months from their date of issue and at an exercise price of C$0.225, subject to the approval of the TSXV.”

About Traxys… “With over 20 global offices and $6 billion in average annual revenue,” Traxys is a global leader in the sales and marketing of a variety of specialty and industrial metals, including the following: magnesium; zinc; copper; lead; cobalt, chrome, manganese; rare earths; vanadium, titanium; tantalum; silicon carbide; uranium; and ferro alloys such as ferro-chrome, ferro-manganese, ferro-nickel, and ferro-niobium. It is majority owned by The Carlyle Group (NASDAQ: CG), with significant minority interests of other private investors and the Traxys management team.” Here’s a link to their web site. https://www.traxys.com/

Here’s some background from the Feb 19 NR https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aWDG-2719447&symbol=WDG&region=C

Info on the consulting firm contracted to present the completed Preliminary Economic Assessment.

https://www.srk.co.za/en

Info on the company contracted to complete the DSO project and provide Giyani with its initial cash flow pre mining production. https://www.worleyparsons.com/

There is much much more but this is a good start. I expect this to be a LOW RISK investment route towards a much higher share price next year. If you’ve made it to the bottom of this page you’ll be starting to see why. I think you would find it useful to call Giyanis’ Management Team to give you further insight into any questions you may have. Just on a side note the CEO Robin Birchall was interviewed at PDAC 2019 in Toronto by Stockhouse. For what it’s worth I was told by a fellow shareholder present at PDAC the interviewer commented afterwards that of the 25 CEOs interviewed Robin was in the top three in terms of professionalism and content.

Scroll ahead to 7:45 to hear Robin

https://www.youtube.com/watch?v=SxGKoDmpP9M

You’ll need to download the player app on iOS for this

https://www.linkedin.com/feed/update/urn:li:activity:6534423113940242432

Giyani Metals is about as close to a ‘no brainer’ as anything out there in the universe of stocks as you can get HOWEVER you should always DYODD. Manganese is globally the fourth most commonly mined element primarily sold as ferro manganese and there’s “lots of manganese in the world” as I’m reminded by people who don’t get it but try to explain to the the average person that the fastest growing segment of the managanese market is the long winded …. 99.9% (NOT 99.7% !) high purity battery grade electrolytic manganese metal (HPEMM) sold to cathode producers which is made into chemicals for battery production. The largest cathode maker in the world, Umicore for example, currently has five years of production on the books already spoken for. That’s just one cathode maker. The number of projects out there that can ECONOMICALLY produce 99.9% purity Mn flake is limited especially outside of China. Think about it….why otherwise do you think product of this purity sells for approx. $4,700 USD/MT ? Think about it…at a planned annual production output starting next year outside China of 40,000 MT anyone can do the math and see a great story unfolding here.

DISCLAIMER: The information included in this case study is based on articles and press statements available on line and the author’s own opinions. It may certainly contain unintentional errors and I encourage you not to make investment decisions based solely on this case study. This case study contains some forward-looking statements based my own extrapolations from information I’ve gathered which may or may not be actualized in the future because of unforeseen risks and outcomes and cause actual results to differ drastically from those currently expected. The views expressed in this case study do not necessarily reflect the thoughts and opinions of Insidexploration. This case study is provided for informational purposes only and is not a recommendation to buy or sell this or any security. Always do your own thorough research and talk to a licensed and qualified investment adviser before making any speculative decisions. Junior resource companies can quite easily lose 100% of their share value. Read company profiles on www.SEDAR.com for important risk disclosures. Myself, my family members, associates and friends own share positions in Giyani Metals. I am not a financial advisor and I have not been compensated to present this case study in any way by any party, related to the company or not.