EDITOR: | December 5th, 2013 | 8 Comments

‘Massive’ increase in Mason’s highest-grade flake graphite resource estimate expected to improve project economics

| December 05, 2013 | 8 Comments
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Mason reports a 658% increase in measured and indicated mineral resources to 50 million tonnes

Mason Graphite Inc. (TSXV: LLG | OTCQX: MGPHF) is rapidly advancing the world’s highest-grade flake graphite deposit — and by a significant margin. Mason’s flagship large flake Lac Guéret Graphite Project in northeastern Québec made some big news today in the graphite world, as the company announced one of its most important milestones to date and advances to production.

Late this morning, Mason reported a 658% increase in measured and indicated mineral resources to 50 million tonnes, including 6.7 million tonnes grading 32.4% graphitic carbon (Cg). 32.4% is tremendous and is almost as large as the company’s initial resource estimate. But why does grade matter so much? In short, with graphite it’s all about the grade. The higher the grade, the less it costs to purify the graphite to >99.96% ultra high purity, technology grade graphite; which is not only in highest demand, but also commands the highest price. Almost any graphite can be processed (upgraded) to what is commonly referred to as ‘battery grade’ graphite. True. However, with lower grade graphite, the associated processing costs to achieve battery grade render the project uneconomic. Mason’s deposit is proving to be just the opposite. Lac Guéret’s initial resource (measured and indicated) is based on a 22-year mine life of 7.6 million tonnes, grading 27.40% Cg (low stripping ratio of 0.76:1 and projected operating costs of $390 per tonne).

The massive increase in Mason’s resource estimate is expected to lead to a potentially more optimized pit design and improved projects economics in the next phase of technical studies. Mason will not release a revised Preliminary Economic Assessment, but rather focus directly on advancing its Feasibility Study, which the company expects to be completed in 2014.

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Mason Graphite President and CEO Benoît Gascon

Commenting on today’s announcement, Mason Graphite President and CEO Benoît Gascon stated: “We expect the scale of growth of our project to positively impact what is already expected to be an economical project. Results from the Lac Guéret Project continue to reinforce our belief in the world-class potential of this asset. The resource estimate is based on the drilling that we completed in 2012, but also on the historical resource estimate we released in July of 2013. We combined all the information into one database and we’re very pleased to report that the measured and indicated mineral resource increased by 658%, from 7.6 million to 50 million tonnes. And the inferred mineral resource increased also from 2.8 million to 11.9 million tonnes. The main parameters of the Preliminary Economic Assessment (issued in June of this year) are still valid.

The 50-million tonne (measured and indicated) overall average grade of 15.6%, including 6.7 million tonnes grading at 32.4%, are very interesting results. All the work completed and reviewing the interpretation, gives us a significant increase in the mineral resource estimate, but also given the size and the amount of information, we expect that we will be in a position to further to improve the economics of the project itself. The conclusions of the PEA are still relevant and valid for the updated model of the new mineral resource. An update NI 43-101-compliant Technical Report will be filed with SEDAR within 45 days. This Resource Estimate is only based on the GC Zone, which is only one of two mineralized zones we identified on our property to date, is comprised of 170 holes (26,500 meters drilled) that increased the width of the deposit to approximately 600 meters, with a strike of 1.2 meters, remains open in all directions.”

As far as what investors can look forward from Mason in 2014, Mr. Gascon said, “The Feasibility Study will provide us the opportunity to evaluate several options to evaluate and improve the economics of the project, including bulk sampling for pilot plant testing, further flow sheet optimization, and to produce a graphite concentrate for selected customers to test. Of course, additional metallurgy will be completed as well purification work to further optimize results and increase our understanding of the whole GC Zone. We will also be continuing to advance the environmental and permitting process in the coming months.

Based on the exceptional results we achieved this year both on the mineral resource estimate and the PEA metallurgy and purification results, Mason is on solid ground heading into 2014 and we look forward to achieving additional major milestones.”

Today’s announcement highlighted that even the newest mineral resource estimate is based on drill data from just the GC Zone, which represents only one of two mineralized zones identified on the Lac Guéret property to date. While the GC zone remains open in all directions, there is also the GR zone, where only 18 holes have been drilled so far. Mason expects “the scale and grade of the new mineral resource” to positively affect the project economics in the upcoming feasibility study. The company’s goal is to advance the project with the aim of becoming a graphite producer as quickly as possible, showing purities of 99.9% Cg from preliminary metallurgy tests at the asset.

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Jim Rogers discussing Mason Graphite on Bloomberg TV

A variety of factors, including the favorable economics, the geological make-up of the mineral and the geographical location, all contribute to the attractiveness and uniqueness of Lac Guéret; however, Mr. Gascon’s extensive experience in graphite (he has, literally, spent his entire professional life in the commodity with over 20 years hands-on experience running the biggest graphite asset in the world, which just happens to be the only North American graphite mine, in operation) and his focus on client relationships — graphite end users — is quite unique too.

Wall Street legend and billionaire trend investor Jim Rogers, Chairman of Rogers Holdings (and one-time George Soros business partner) recently appeared on Bloomberg TV and commented on Mason: “Mason Graphite apparently has the purest [graphite] deposit in the world and is run by the world’s experts; people who have been in the graphite business a long time. As far as I know, that’s the best [graphite] play.”

Ty Facts about Mason Graphite’s Advantages: 

  • Mason Graphite is developing the highest-grade flake graphite deposit in the world. Ultra-high-purity, large-flake graphite (premium priced graphite) demand in anticipated to increase worldwide.
  • Poised to be one of the lowest-cost producers. Minimal processing required to achieve ultra high purity (this means Mason’s graphite will be better than competitors’ graphite that has been heavily optimized to achieve the same level of graphite purity and will cost less to produce).
  • One of the lowest CAPEX costs in the graphite industry, projected to be $89.9 million.
  • Proven track record. This, to me, is crucial. Mason’s management has unrivaled experience in the graphite industry.

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Comments

  • Dr. Copper

    Mr. Dinwoodie, with graphite you dont need to purify in fact Id say its never done
    at source unless its consistent. So grades is completely irrelevant as is how many gazillions of tonnes you have in a deposit. Just look at outcrop chasing head of the robot trading que Syrah Resources and soon Triton Minerals (previously named
    Triton Gold).

    What matters is source TGC purify and its crystallinity range.

    Thats why the impurities matter of source material in your metallurgy lab.

    Its chemistry in Graphite not word wisdom of my lolly pop is cheaper than
    theirs.

    Costs only matters if you can produce a consistent product, the rest is lip talk.

    December 6, 2013 - 6:08 PM

    • Tim Ainsworth

      Drawing a line through that, news of the Uley deposit coming back into production has apparently attracted expressions of interest from previous customers, from over 20 years ago!
      Word has it that one company put five of its engineers straight on a plane from Japan to Sth Aust to conduct a site inspection, based on previous knowledge of the product.
      With production from stockpile projected H1 CY14 it will be interesting to follow the progress to market.

      December 6, 2013 - 10:02 PM

      • Dr. Copper

        yep, I agree with you, Sth Australia will be the first new supply zone of graphite, and a very important one due
        to its structure and rock compositions.

        Dr. Parker once baptised the eyre peninsula the pilbara of graphite, a term many still hasnt come around to recognise maybe its a too grand thought for some to
        accept lol.

        been following d’arby for some time now, lets see
        if he on his own can turn it around in a creditable
        way.

        December 7, 2013 - 7:08 AM

        • Tim Ainsworth

          Project will live or die on product acceptance. ATM they apparently have broad interest translating into offtake agreements for the material to be processed from stockpile with existing plant. If all goes to plan shouldn’t take too long to get some answers, and I imagine reasonable success would focus quite a bit of attention on the Eyre peninsula as a whole.

          December 8, 2013 - 9:02 AM

  • Dr. Copper

    here is the link to Jim Forgers interview on bloomberg.

    http://m.youtube.com/watch?v=UVmqshKBR_I&desktop_uri=%2Fwatch%3Fv%3DUVmqshKBR_I

    did you hear him say…..’graphite comes from graphene..’ and ‘nobody
    can break up graphite…’ ?

    I wonder what else he is being told because surely his not quite with it.

    December 6, 2013 - 6:21 PM

    • Ty Dinwoodie

      Yes, I caught that too in the Mr. Rogers’ Bloomberg interview. He merely misspoke.

      December 9, 2013 - 11:43 AM

  • vacuum

    Questions to ask Mr. Rogers:

    Since graphite is old coal that don’t ignite, is it possible that some coal mines can rebrand themselves as graphite mines–since the coal industry is getting hassled, all the more incentive to do this.

    Do graphite miners borrow expertise from coal miners? Or do they reinvent the wheel, hence drive up costs and therefore issue more shares of stock. Appalachia and South Africa are never mentioned when discussing graphite, yet both places have huge amount of coal intelligence. Whereas China is mentioned, and China does coal and graphite.

    What if the resource of some company, whose shares you own in size, is ostensibly graphite and actually a coal ore body. Then, Santa has put coal in your stocking. You better be nice. Santa Clause is coming to town.

    December 7, 2013 - 7:20 AM

  • Graphite & Graphene Week-in-Review: Mason Graphite (+16.67%), Zenyatta (+6.28%) & Nouveau Monde (+4.76%) | InvestorIntel

    […] Mason Graphite Inc. (TSXV: LLG | OTCQX: MGPHF) decidedly took top honors for the week, with shares increasing +16.67% and +16.09% on the Canadian and American exchanges respectively. If that wasn’t impressive enough, on December 11th, Mason jumped +29.17% for the day (reaching CAD$0.62 on the Canadian exchange). Interestingly, Mason did not release any news last week. The company’s last news release was the major December 5th announcement in which Mason reported a 658% increase in measured and indicated mineral resources to 50 million tonnes, including 6.7 million tonnes grading 32.4% graphitic carbon (Cg). Mason is rapidly advancing its flagship large flake Lac Guéret Graphite Project in northeastern Québec and expects to complete its Feasibility Study by mid next year. Led by President and CEO Benoît Gascon and his highly experienced team, Mason is on very solid ground heading into 2014 and looks forward to achieving additional key milestones. […]

    December 18, 2013 - 9:45 AM

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