London, UK, 18 July 2017

Edison issues initiation on Triton Minerals (TON)

Triton Minerals plans to develop its Ancuabe graphite project in Mozambique to feed the established and high-growth expandable graphite market. In our view, this is a prudent way forward in a sector dominated by graphite companies tussling with the vagaries of battery-ready graphite production and an end-market yet to mature. With East African graphite deposits already advancing in many cases (AMG's Ancuabe mine is now commissioned, Syrah's Balama is under construction, Volt Resources is securing off-takes), it is clear the region's graphite is suitable for industrial uses. An important constituent is China, where some producers are aiming to outsource raw graphite in order to clean up old, inefficient graphite mines as well as secure expandable graphite for the recently revised (2015) fire-retardant cladding regulations.

Our SOTP base case valuation is 22c per share, based on the Ancuabe scoping study (60% of our SOTP value or 13c) with a further 9c (the remaining 40% of our SOTP valuation) added based on a discounted valuation of the company's very large additional resources at Balama and Nicanda Hill/West. Our base case valuation uses a notional 75/25 debt/equity structure to fund Ancuabe's development, assuming equity at the current share price (5c). However, our valuation is sensitive to the share price assumption of the equity component: at a 10.0c share price, our base case valuation becomes 26c; at 15c it becomes 28c. Our Ancuabe valuation uses a weighted graphite concentrate basket price of US$1,369/t and a 10% discount rate to reflect general equity risk.

Click here to view the full report.

All reports published by Edison are available to download free of charge from its website
www.edisoninvestmentresearch.com

About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact Edison:

Tom Hayes, +44 (0)20 3077 5725
Charles Gibson, +44 (0)20 3077 5724
mining@edisongroup.com

Learn more at www.edisongroup.com and connect with Edison on:
LinkedIn https://www.linkedin.com/company/edison-investment-research
Twitter www.twitter.com/Edison_Inv_Res
YouTube www.youtube.com/edisonitv