READ TIME: 9 MINUTES
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Sarytogan Graphite owns one of the world’s highest-grade natural graphite deposits in Kazakhstan, with a pre-DFS strategy focused on staged development, metallurgical de-risking, and securing off-take agreements. The conversation with CEO Sean Gregory covers a wide range of operational and strategic issues, including the company’s financials, insider ownership, royalty structure, marketing efforts, permitting in Kazakhstan, the role of the European Bank for Reconstruction and Development as a strategic investor, and more.
TL;DR
- Sarytogan Graphite is in the pre-feasibility stage of developing a large graphite deposit in Kazakhstan with an initial capex estimate of US$62 million.
- CEO Sean Gregory and co-founder Waldemar Müller hold equity and performance-based compensation, while Müller retains a 3% royalty on mine-gate revenue.
- The European Bank for Reconstruction and Development (EBRD) owns 17% of the company.
- Offtake discussions are underway, but timelines differ by product type, with battery-grade qualification expected to take several years.
- The company holds approximately AUD $3.5 million in cash and plans to deliver a DFS by mid-2025, while keeping spending focused on technical work and marketing.
Is Sean Gregory the right man for the job?
Gregory brings more than 25 years of mining experience, starting with BHP in iron ore and lithium, later working with Mineral Resources Limited on multiple mine developments. This is his third ASX-listed CEO role. “My real passion is developing projects… taking projects from late-stage exploration and bringing them to reality,” Gregory said. He credits his success in Kazakhstan to a partnership with Dr. Waldemar Müller, a 50-year veteran geologist and co-founder of Sarytogan.
Does the technical team have the right experience?
The team has grown into graphite expertise since acquiring the project in 2018. Gregory said, “We’ve both learned a lot about graphite along the road… now we’re actually experts in this field.” Key additions include Antonio De Assis, a sales and marketing director with 15 years of graphite experience, and CFO Sarkis Akapov, a Russian speaker helping navigate Kazakh operations. The in-country team consists of eight experienced professionals, all critical to the project’s development.
How many shares does Sean own?
Gregory owns one million shares and about seven million performance rights, tied to milestones like DFS completion and production. The company also issued 1.5 million shares to the senior team under its employee share option plan. “We’ve got the team set up to enjoy the success of the company,” Gregory said.
What’s the average cost of the insider shares?
Waldemar’s shares were issued at 20 cents as consideration for the project. Gregory’s performance rights are milestone-based and not priced like ordinary shares. This structure aligns incentives with shareholder value creation.
Why did Waldemar sell shares?
Gregory clarified that Waldemar’s sell-down in July 2024 was a one-off, off-market transfer to two large shareholders, reducing his stake to 25%. Gregory emphasized that further insider selling is unlikely: “There’s absolutely no way any reasonable person would do that.”
Will insiders be buying more shares?
Gregory does not plan further open-market purchases and noted that insider buying is constrained by trading policies. However, he pointed to his performance-based rights as a strong alignment with shareholder interests.
Does management own royalties on the project?
Waldemar holds a 3% vendor royalty on mine-gate revenue. Gregory views this as aligned with shareholder goals: “I don’t see a disconnect between the value of the royalty and the value of the shares – they’re one and the same thing.”
Why is the share price down?
Gregory attributes the low valuation to poor graphite market sentiment and a lack of liquidity. “There is very little sentiment for graphite,” he said. Benchmarking charts show a disconnect between Sarytogan’s asset quality and its market cap. Despite the challenges, Gregory believes the bottom of the graphite cycle has passed: “We stand on the quality of our asset.”
How can they get the share price up?
Sarytogan aims to complete its DFS, advance marketing and financing, and align itself with peers like Syrah and Talga. Gregory is optimistic that sentiment will recover: “We believe we’re moving into a rising sentiment for graphite.”
Why not take it private?
Despite frustrations with ASX visibility, Gregory values public listing benefits like investor liquidity and capital access: “Being a listed company allows investors to decide when to exit.”
What’s the history of the asset?
Originally discovered in the 1980s by Soviet geologists, the deposit was pegged by Waldemar in 2018 after Kazakhstan’s mining code reforms. The asset, initially seen as undesirable due to its fine grain, is now prized for battery-grade purity. Gregory noted: “We achieved 99.9992% purity… every product family outperforms incumbent products.”
What’s the business strategy?
Gregory said Sarytogan operates as if it will bring the project into production itself: “If the tap on the shoulder comes… happy days.” The plan is a staged development, starting with a US $62 million upstream operation, which Gregory calls “eminently fundable.”
Would the Kazakh government want a piece of the asset?
Kazakhstan is supportive but not currently a shareholder. Gregory praised the country’s pro-mining bureaucracy and strategic ambition: “Kazakhstan is an alternative [to China] and is actively seeking critical minerals partnerships.”
How do they manage political risk?
Sarytogan maintains a neutral stance, open to East and West. “We don’t make decisions based on geopolitical setup alone. We’re commercial about what’s best for shareholders,” said Gregory.
Why is the EBRD getting involved?
The EBRD’s due diligence was rigorous and spanned 18 months. Their investment supports Kazakhstan as a hub for energy transition metals. “They’re looking to grow a customer,” Gregory explained, referencing their JUMP initiative for junior miners.
Are they talking to potential off-takers?
Yes, with “hundreds of calls” made by Gregory and Antonio. The qualification process is long, especially for lithium-ion battery producers. Samples are being prepared as part of a $1 million marketing initiative.
When will they have an off-take agreement?
Timelines vary: 3 years for battery-grade material, 18 months for lead-acid batteries, and faster for industrial products. This staggered approach aligns with their staged development.
What work is happening right now?
Two drill rigs are operating for reserve definition. Environmental baseline studies, power and water assessments, and land acquisition are underway. Gregory emphasized: “A DFS isn’t the time to be optioneering.”
When’s a DFS coming?
The DFS is expected by mid-next year. “That is a cast-iron guarantee,” Gregory asserted. His performance rights are directly tied to its delivery.
Can met work impact the DFS?
Metallurgical results show the ore is softer than expected, leading to potential cost savings on grinding and milling. Gregory said: “It flows through to a direct cost saving.”
How much money do they have now?
As of the time of the interview, Sarytogan Graphite held approximately AUD $3.5 million in cash. Gregory confirmed that this funding is sufficient to cover the company’s current exploration, metallurgical, and marketing activities for the foreseeable future. “We’ve got enough money to see us through this year’s exploration and technical work,” he said. This includes the continued drill program, sample generation for potential off- takers, and pre-DFS preparations.
Debt or equity?
Sarytogan is considering a mix of debt and equity financing for future development. Gregory indicated that the presence of EBRD as a shareholder improves the company’s prospects for accessing debt funding. “If we get to the stage where we have bankable feasibility and off-takes, the project becomes financeable with debt,” he said. However, he acknowledged that equity may still be required to maintain a clean capital structure, especially in the near term. The company remains open to both funding avenues depending on market conditions and project milestones.
How much time is spent on the copper projects?
Copper exploration is a very minor focus for Sarytogan. According to CEO Sean Gregory, less than 5% of their time and budget is allocated to the copper assets. He emphasized that graphite remains their “core value driver,” and they won’t allow copper to distract from their main project.
Why not spin out the copper assets?
While spinning out the copper assets is an option the company has considered, Gregory expressed caution. He believes a premature spin-out would not maximize value: “There’s no point spinning them out and giving away value for free.” The company may revisit this option once their graphite project is more advanced and the market is more receptive.
Are they after copper porphyries or something else?
Saratoga Resources is clear in its exploration ambitions: “The primary target is copper porphyry mineralization… with a few gold credits,” said Sean. Their flagship targets, Ilken and Ammon Bay in Kazakhstan, are “absolute textbook porphyry targets,” backed by geological and geochemical data. The company is tapping into significant regional momentum, with “all of the majors” present in Kazakhstan, including BHP, Rio Tinto, and Ivanhoe Mines.
Do they have local community support?
Proximity to their graphite project (just 20 kilometers away) has given Saratoga a head start in community engagement. “We’re well ahead of the curve,” Sean asserted, noting that they already have land agreements and full permitting for drilling. Their local director, Maxim, plays a critical role: “He actually speaks Kazakh… which really opens doors in those local communities.” The company also benefits from infrastructure like highways and power lines that run “right through the guts” of their copper project.
Will their administrative cost go up?
Despite expanding exploration activities, Saratoga expects administrative costs to remain steady. “The spend profile continues from what we’ve done the previous 12 months,” Sean said. Having a local team of eight in Kazakhstan, rather than relying on costly contractors, has kept general and administrative (G&A) expenses manageable.
How much are they spending on marketing?
Saratoga’s marketing spend is targeted and ongoing: “All up… probably about $100 grand a year,” Sean revealed. This includes conference appearances (e.g., IMARC, RIU, and London’s 1-2-1), digital media outreach, and use of the Investor Hub platform. “We also do the Bulls and Bears program,” he added, which distributes their news across major Australian digital outlets like The Age and Sydney Morning Herald.
What keeps them up at night?
Unsurprisingly, the graphite market dominates Sean’s concerns: “If I had a magic wand… it would be investor sentiment towards graphite.” While market dynamics are beyond his control, he remains focused on delivering a “high-quality project that can survive any level of the cycle.”
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