Mason Graphite expands resource and stock moves +25% in July
Mason Graphite Inc. (“Mason”, TSX.V: LLG | OTCQX: MGPHF) has the potential to deliver very high purity graphite – up to 99.9% graphitic carbon content – in response to new industrial applications, using traditional processes, which require relatively modest investment. On July 29, Mason expanded its resource, announcing the discovery of high-grade intersections graphite in the northeastern extension of Lake Gueret beyond the original target zone. The drilling identified a mineralized interval of 98 m at 29.8% Graphitic Carbon (Gc) as part of its 2013-2014 exploration campaign, comprising 97 holes totaling over 15,000 meters aiming to extend the project area while identifying mineral continuity within the established limits. Mason said that the results have confirmed the presence of mineralization near the surface with excellent widths and beyond the limit of the current resource. The estimated resources represent over 150 years of production. The Lac Gueret Project is world class: it is rich in crystalline graphite, which draws international market demand.
Mason Graphite expects the mine to operate for at least 22 years, starting with an annual production of 50,000 tons of graphite concentrate. Production costs have been estimated at about USD$ 390 per ton of finished product, which now sells for USD$ 1,525/ton on average. In this context, Mason expects to achieve a rather prompt return on investment or merely after two and a half years of operation. Mason expects to use a method of concentrating and separating that avoids a blast furnace, which means it will be more energy efficient, requiring less gas. The project also benefits from good infrastructure and good roads: everything suggests the project is fully viable. Mason graphite plans to export the ore to U.S. markets and overseas territories. Mason has also covered important community aspects to ensure the Project’s ultimate success. In July, Mason signed a of a memorandum of cooperation with the Innu Council of Pessamit given that its future mine is located (300 km north of Baie-Comeau) in Nitassinan, a traditional territory belonging to the First Nation of Pessamit. It is expected that at full operation, Mason’s project will provide 80 direct jobs to be shared Aboriginal and non-natives in the region. Eventually, the company will have an annual capacity of 50,000 tons of graphite concentrate that proponents call “exceptional quality.” The mine construction could begin in 2015. On July 16, analysts from National Bank started to follow Mason Graphite and analyst Rupert Merer and not surprisingly: Mason’s deposit has some of the highest grade of ore in the world at 27.4%.
Mason’s resource promises to be rich in large and medium flake graphite, the most desirable variety of graphite for applications in clean energy, lighter and more powerful batteries, super capacitors for wind turbines and pebble-bed nuclear reactors. Meanwhile, given its high grades potential, Mason will be ready to address those applications as they become commercially relevant. While Mason is certainly targeting the emerging high technology market, as battery technology advancements trickle down from the lab to retail, Mason is different from other emerging graphite companies, in that it has plans to generate short term revenue as well by addressing the more ‘traditional’ graphite market as well – or first – such as the steel industry, which needs refractory materials for furnaces and carbon enhancers in steel alloys or lubricants.
Mason believes these sources will help it grow in the near future while high-tech batteries and other applications will become more commercially relevant in a few years’ time, representing a future and additional source of revenue. Meanwhile, Mason is also squarely projected to the future as demonstrated its collaboration with Group NanoXplore Inc (‘Nanoxplore’), which has given the Company an edge into the emerging graphene market. NanoXplore has developed a proprietary low cost electrochemical method to convert natural flake graphite into graphene, which uses less energy than the more widely used vapor deposition and liquid exfoliation methods. NanoXplore’s main advantage, given its lower cost, is scalability, which gives it the potential to make graphene into a more widely available material, bringing it from the lab to the market. Graphite has long gone beyond pencils; it is essential in many industrial applications in batteries for electric cars. There is growing demand for lithium ion batteries and it could increase at a rate estimated at between 15% and 20% per year according to some analysts.