From steel to graphene, Mason is one of the ‘best rounded’ companies in the graphite sector
Mason Graphite Inc. (“Mason”, TSX.V: LLG | OTCQX: MGPHF) is proving to be one of the most attractive companies in the entire graphite sector. Mason delivered a strong Preliminary Economic Assessment (PEA) in April 2013. Its highlights included a 22-year mine life with an over 96% rate of graphite recovery and the potential to deliver grades well in excess of 96%. Moreover, in September 2013, Mason showed that it can achieve extremely high purity levels – up to 99.9% graphitic carbon content – in response to new industrial applications, using traditional processes, requiring modest investment.
Mason’s resource promises to be especially 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. Large flake graphite, which is cheaper to process than the amorphous variety, has seen sharply rising demand, accounting for a fivefold price increase from USD$ 500/ton to USD$ 2,500/ton since 2005 with the steepest price increases occurring over the past two years.
Apart from the quality of the Mason project itself, Benoit Gascon’s more than 20 years experience in the graphite space is also reassuring. Mr. Gascon served as CEO of Stratmin Graphite, one of the few graphite producers in North America, having a deposit in the same highly prolific Lac-des-Iles zone. Gascon has decades of experience in the graphite industry and he understand what it takes to address the very specific customer needs for this commodity as well as how to confront competition from China. Mason Graphite is very close to Timcal’s Lac-des-Iles deposit – which has just a few years of ore supply remaining. Given, Gascon’s connection to Timcal and Mason’s geographic proximity, the possibility of some kind of ‘union’ between these two cannot be ruled out in the medium term.
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 and none demonstrates this better than its recent investment in Group NanoXplore Inc (‘Nanoxplore’). Mason closed the first tranche of its investment in NanoXplore on January 13th 2014, under an agreement whereby Mason Graphite can acquire up to 40% of NanoXplore’s issued and outstanding shares for $700,000 in two tranches. The second tranche should be completed by or before July 31, 2014.
The deal will give Mason Graphite an edge into the emerging graphene market as a supplier of graphite and a distributor of graphene. This is because, 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.
The exploration and development of graphene is underway in many countries at full speed. China has taken the lead in the race for potential graphene applications with Ningbo Morsh Technology, which built the world’s largest to-date graphene production plant last January. As noted by InvestorIntel’s Dr. Luc Duchesne, in 2013, there has been a sharp increase in patent applications for various graphene applications since 2007. This trend has accelerated even further in 2013 and, unfortunately for the ‘West’, China is currently the world leader in such patents. Ningbo Morsh is able to make 15-inch single-layer graphene films. The company has already signed a deal with ‘Guangdong Zhengyang’ to make ten million ‘Thin Film Composites’ (TCF) used for the production of super-thin, touch- sensitive screens for mobile devices. The investments are expected to amount to the equivalent of around 16 million dollars.
The Chinese have made graphene research one of their technological priorities and they are quickly moving from the pure research and development phase towards implementation in various application-ready products. One of the most eagerly awaited developments will be the production of graphene coatings for Li-ion battery cathodes, which translate to a much longer battery life (by slowing down the discharge rate) and to improved cycle stability. China is also planning a graphene industrial park to advance the research and development of this material and the prompt development of new practical applications.
In this context, Mason’s deal with NanoXplore is far more valuable than its financial cost. It is one of the first – and few – examples of direct collaboration between a high grade graphite supplier such as Mason and a graphene production company. NanoXplore and Mason, therefore, will be competing alongside the graphene R&D facilities being set up around the world in the race to achieve the best method to deliver scalable graphene. All the while, Mason has ‘hedged’ its future by addressing all graphite applications, making it one of the best-rounded companies in the sector.