NextSource Materials Inc.

What they do

NextSource Materials is engaged in the acquisition, exploration and development of mineral resources, primarily the Molo Graphite Project in Madagascar. The Molo Graphite Project currently consists of a commercially minable graphite deposit, but no mine infrastructure exists at the site. The company also holds additional exploration-stage properties in Madagascar, including the Green Giant Property. Its business activities have been financed entirely from proceeds of securities subscriptions.

Revenue drivers

• Molo Graphite Project — The company's primary focus is developing the Molo Graphite Project into a fully operational graphite mine, but it has not generated any operating revenue to date.
• Green Giant Property — An exploration-stage property in Madagascar, with no revenue contribution and no reported production.
• Financing activities — The company has funded operations solely through securities subscriptions, not from product sales.

Recent performance

For the quarter ended September 30, 2017, the company reported no revenue. Annual net income was -$4.0 million in fiscal 2017, following -$1.6 million in 2016. Diluted EPS was -$0.01 in 2017. Operating cash flow was -$3.4 million in 2017. As of September 30, 2017, total assets were $1.6 million, total liabilities $585,825, and shareholder equity $985,394, with cash of $1.4 million.

Strategy

NextSource Materials changed its name from Energizer Resources Inc. in April 2017 as part of a rebranding to reflect its transition from an exploration-stage company to a mine-development company. The company's principal business is the development of the Molo Graphite Project. It expects to complete the renaming of its subsidiaries by December 31, 2017. The company has not generated operating revenues or paid dividends since inception and is unlikely to do so in the immediate future.

Risks

• No revenue or production — The company has not generated any operating revenue since inception and has no mine infrastructure at the Molo Graphite Project.
• Reliance on financing — Business activities have been financed entirely from securities subscriptions, and the company may need additional capital to develop its projects.
• Development-stage risks — The Molo Graphite Project is not yet operational, and there is no guarantee it will be successfully developed into a producing mine.
• Jurisdictional risk — The company's principal assets are located in Madagascar, which may present political, regulatory and operational risks.

Outlook

Management states that the company is focused on developing the Molo Graphite Project into a fully operational and sustainable graphite mine. However, no timeline or production targets are provided in the excerpts. The company expects to complete the renaming of its subsidiaries by December 31, 2017. It does not anticipate generating operating revenues or paying dividends in the immediate future.