Energizer, Deveron and Great Lakes Graphite move north in spite of a sluggish market
Graphite Market Review — The Graphite & Graphene market remained sluggish for the graphite sector in general and, on average, the share price of InvestorIntel graphite members dropped 3.84% in the week ending on November 14. However, some companies bucked the trend and posted strong gains rebounded and the biggest gainer was Energizer Resources (‘Energizer’, TSXV: EGZ | OTCQX: ENZR), whose stock went up +13.33% in Toronto trading. Energizer’s exploration and development joint venture partner, Malagasy Minerals (ASX: MGY) announced that it had begun drilling several graphite zones, formally launching its Maniry Graphite Project in Madagascar, where Energizer discovered a large region containing excellent graphite deposits. The Maniry project in southern Madagascar consists of 34 drill zones extended across an area of 6.5 by 2.5 km. Individual drill holes could reach depths of up to 350 meters over an area of 1.5 km. The early data suggests the graphite ore is of very high grade and that it has not been excessively contaminated by other minerals, which will other rocks which will facilitate its refinement into pure flake graphite.
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Alabama Graphite (‘AGC’, TSXV: ALP | OTCQX: ABGPF), dropped slightly in Toronto trading, even as it announced that it would be exploring five new targets over the next few months based on identified ‘anomalies’ that hold significant promise for large flake graphite. At Coosa, AGC, has been evaluating new exploration targets identified during flight and ground survey activity. The results will be published as they become available but the trenching program should be concluded by the end of November.
Great Lakes Graphite (TSXV: GLK), which enjoyed good result last week, continued to move up, gaining +7.14% as investors absorbed the significance of its new infrared (IR) graphite concentration test method, allowing it to ensure higher quality standards for prospective customers as it proceeds toward the delivery of a resource estimate in the next few months. Great Lakes has joined the graphite race late but it is one of the most ambitious companies in the sector. Deveron Resources (TSX: DVR) also showed some resilience, rising 8.11%. Deveron’s Rockstone project in northwestern Ontario is being developed to deliver graphite as well as zinc. Recently Deveron signed an option agreement for up to a 100% stake in the Rockstone property (in northwestern Ontario) from Greencastle Resources. Zinc has been one of the few raw materials to rise in value because of a production deficit, which is expected to last for the next few years as many zinc mines have ‘fizzled out’, with some having been forced to shut down in Canada.
Kibaran Resources (‘Kibaran’, ASX KNL) issued an interesting report last week outlining favorable results from its Mahenge Graphite Project and specifically the Epanko deposit for which a feasibility study is being prepared and where the company has already established an inferred resource of 14.9 million tonnes grading 10.5% total carbon graphite and 1.56 million tonnes of contained graphite – and this based only 20% of the project area. Kibaran suggests that the technical evidence from Epanko suggests that it hosts a large flake deposit featuring material of the highest quality. Significantly, Kibaran and a subsidiary of the German industrial conglomerate Thyssen-Krupp have signed a Memorandum of Understanding for an offtake for an initial 20,000 tonnes of graphite per year. Thyssen was impressed by the optimal distribution of large fluffy material a longer mine life than previously expected, and the ability to increase production still should be an increase in demand in the future.
Discovery Africa Ltd, (ASX: DAF) lost 15.79% even as it announced that it has secured an additional 103 square kilometer license for its Nachingwea graphite project in Tanzania. The rock sampling mentioned in in this new license, valid for four years, revealed levels of 7.22% and 5.55% of total carbon-graphite; Discovery also controls significant graphite assets in Uganda.
Graphite, while suffering the same price disease that has affected most resource stocks, promising or not, is easier to mine than other minerals. Because of its electrical and thermodynamic qualities, electromagnetic survey equipment picks it up easily and thus it makes for a far less costly exploration process than other minerals. Moreover, much of flake graphite deposits are located near the surface, which also reduces risks while allowing for open-pit mining, a much cheaper alternative than other methods.