Graphite Market Review: Mixed performance despite a lot of good news
Graphite Market Review — Of the graphite stocks InvestorIntel tracks, market performance was mixed, down 1.33% overall. The biggest winners for the week ended October 10, 2014 were; Energizer Resources Inc. (TSXV: EGZ) (OTCQX: ENZR), up 11.11% and 8.02%, respectively. Mason Graphite Inc. (TSXV: LLG) (OTCQX: MGPHF) up 7.81% and 10.71%, respectively on positive news, (see below). On the down side there were 4 stocks off more than 10%. Triton Minerals Ltd (ASX; TON) was down 16.18%, despite positive news, (see below). Flinders Resources Ltd. (TSXV: FDR) was down 15.25%. Sovereign Metals Ltd. (ASX: SVM) was down 13.64% on no discernible news. Finally, Elcora Resources (TSXV: ERA) was down 12.50% despite positive news, (see below). Mixed performance, down 1.33% overall, is somewhat of a victory compared to the last 3 weeks.
Graphite Market Review, for the week ending October 10, 2014: On October 9, 2014 Alabama Graphite Corp. (TSXV: ALP) down 4.44% and (OTCQX: ABGPF) up 0.25%, announced that it has completed ground geophysical surveys at the recently acquired, prior producing, Bama Mine Graphite Project as well as some additional areas at the Coosa Project in Alabama, USA. The surveys were conducted by KLM Geoscience using a GEM2 device.
GEM2 is a frequency domain electromagnetic system that is a cost-effective technique for detecting near-surface (oxidized) graphite mineralization. A previous survey at the Coosa Project demonstrated that it produced the highest rate of detection with the lowest rate of false-positives of any of the techniques tested. A total of 70 additional line kilometers were run at the Coosa Project to augment the 54.7 kilometers from the survey run in July, 2014. An additional 80.7 kilometers were run at the recently acquired Bama Mine Project in Chilton County. The GEM2 data is currently being processed and will be used to guide exploration/drilling work at both projects.
“Because of the large land position controlled by Alabama Graphite, a cost-effective way of evaluating the acreage is of critical importance to focus the Company’s efforts,” commented Ron S. Roda, CEO. “Our previous experience in using the GEM2 instrument as a prelude to sonic drilling at the Coosa Project showed a very high degree of correlation with graphite mineralization. We expect to use these survey results at both the Coosa and Bama Mine Projects to guide drill programs to begin in the coming weeks.”
The Company, through its wholly-owned subsidiary, Alabama Graphite Company Inc., is conducting exploration and development both at its flagship Coosa Graphite Project in Coosa County, Alabama, USA and the recently acquired Bama Mine Project in Chilton County, Alabama. These two advanced-stage projects are 100% owned by Alabama Graphite and are on private land. The two projects encompass over 43,000 acres and are located in an area with significant historical production of crystalline flake graphite. The Company has the largest NI 43-101 indicated flake graphite resource in the United States based on drilling 0.18 square miles (0.3% of the total acreage). The Alabama deposits are unique in that a significant portion of the graphite-bearing material is oxidized and has been broken down into an extremely soft rock.
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Alabama Graphite is the subject of a new research report by Hallgarten & Company. A link to that report can be found here. I found this research to be highly informative and very well done. In it, the author, Christopher Ecclestone, provided a detailed description of Alabama Graphite including the history of the company’s highly prolific graphite deposits in Alabama. Particularly compelling to me was the point about the very soft host rock from 0 to 30 meters. The material crumbles in one’s hand, according to Ecclestone. This means that the cost of mining, blasting, crushing and grinding, (more like simply excavating) should be relatively low. A PEA for Alabama’s main graphite project is expected in the first quarter of 2015.
On October 9, 2014 Triton Minerals Limited (ASX: TON) down 16.18%, confirmed receipt of further assays and mineralogical results for the Nicanda Hill prospect. Triton Minerals’ Managing Director Brad Boyle said,
“Diamond drilling has again confirmed the world class potential of the Balama North project. To intercept substantial graphite mineralisation down to depths of 475m in single drill hole, with the mineralisation open at depth, combined with high grade graphite intercepts of up to 34.1% TGC, are again very exciting results. The identification of a possible hydrothermal breccia zone and the confirmation that there is a substantial presence of large flake graphite throughout the 6.2km mineralisation footprint at various depths is very encouraging. Further, the continued intersections of high grade graphitic and vanadium mineralisation in the mineralisation footprint reinforces the Company’s belief that the Nicanda Hill prospect will become one of the world’s largest multi-element projects. These latest drill results continue to provide a solid foundation for the initial large JORC 2012 resource at Nicanda Hill.”
These tests also confirmed the strong presence of Vanadium within the graphitic samples, obtaining grades up to 0.50% V2O5. These initial vanadium tests found the high grade vanadium concentrate was being recovered from a full range of vanadium flake sizes. The Company’s latest mineralogical test results show on average the a graphite flake size distribution as follows; 23% of the graphite samples are very large flake which are 212μm or larger, 36% are greater than 106μm (medium to large flake), 17% are greater than 75μm (medium flake), and 24% are less than 75μm (small flake) in size. Given the wide-spread nature of the sampling, Triton believes these results are more representative of the type and sizing of the graphitic material found at the Nicanda Hill prospect.
The strong vanadium assay results has again increased Triton’s confidence in the Nicanda Hill prospect, as a very large multi-element project and these results also underscore the potential importance of vanadium with respect to the overall future economics of the project when in production. The combined exploration and drilling data received to date continues to both enhance the geological robustness of the flagship Nicanda Hill prospect and support the rapid advancement towards another JORC compliant resource by the end of 2014.
On October 8th Mason Graphite (TSXV: LLG) up 7.81% and (OTCQX: MGPHF) up 10.71%, reported the second batch of assay results from the 2013-2014 drilling program at its Lac Guéret project in northeastern Quebec. The drill program consisted of 97 holes totaling 15,108 metres and was designed to pursue three objectives:
- to explore for mineral extensions to the North-East and beyond the defined resource envelope of the GC Zone (18 holes totaling 2,085 metres)
- to explore for mineral continuity within the defined resource envelope of the GC Zone (68 holes totaling 11,323 metres); and
- to conduct exploration drilling on graphite showings on the property located beyond the areas where drilling had previously been conducted (11 holes totaling 1,700 metres).
“We are very pleased that these new results confirm the continuity of the mineralization within the GC zone. Furthermore, we continue to obtain high graphite grades, which supports our belief in the exceptional quality of the Lac Guéret property. These latest results will be combined with those from the North-East extension to update our resource estimate, which is expected to lead to the upgrade of the resource categories and to also allow for the optimization of the mining plan during our Feasibility Study.” said Benoit Gascon, President and CEO of Mason Graphite.
Intercept highlights from drilling conducted inside the PEA open pit envelope in the GC Zone include:
- Hole LG-403 intersected 76 metres at 27.5 % Cg, including 38 metres at 39.3 % Cg;
Intercept highlights from drilling conducted outside the PEA open pit envelope in the GC Zone include:
- Hole LG-420 intersected 42 metres at 24.6 % Cg, including 17 metres at 34.7 % Cg near the surface (7 metros);
On October 9, 2014 – Troy Grant, President and CEO of Elcora Resources Corp., (TSXV: ERA) down 12.50%, reported that metallurgical tests are being conducted by SGS Canada Inc., Lakefield, Ontario to determine the preferred processing circuit for the graphite from the Company’s Sakura mine site in Sri Lanka. The preferred circuit will minimize processing damage to the graphite crystal morphology (i.e. damage to the graphite flakes) during processing while optimizing the flake expandability and ultimately enabling its subsequent conversion to graphene.
The initial stage of the process will reduce the size of the graphite particles to a size somewhat larger than the largest graphite crystal, and will remove impurities including large silica particles rendering the samples suitable for specialized grinding. After processing through a cone crusher the sample material will be separated into size classes and assayed to determine the degree of breakage of the silica and graphite. These tests will not be improving the grade of the graphite but rather preparing the samples for subsequent testing and for visual examination to characterize the damage to the graphite morphology.
“We are excited to take this forward step” said Troy Grant, Elcora’s President and CEO. “Our corporate plan is to position Elcora to deliver premium graphite and, ultimately, graphene product to end users. The ability to deliver downstream will set the Company apart from its peers, and is consistent with the vertically integrated business strategy that we are pursuing for benefit of shareholders and stakeholders.”
A second stage of advanced tests on the material prepared by SGS Canada Inc. are scheduled for later in October, 2014. These tests will further reduce the size of the particles to that of the individual graphite crystals by liberating the individual graphite crystals from other graphite and from the silica and other impurities.
Additionally the Company has completed a several tranches of financing by way of private placement. On June 30, 2014, the Company closed a non-brokered private placement issuing 8,976,875 common shares at $0.16 together with 8,976,875 warrants exercisable at $0.30 for 18 months and raising $1,436,300.
On October 9th, Valence Industries Ltd. (ASX: VXL) up 4.62%, announced it has discovered a new globally unique flake graphite deposit zone with intercepts exceeding 60% graphitic carbon. Significant intersections in the new zone include flake graphite grades of 61.5% graphitic carbon over 2.6 meters. Super jumbo flake graphite sizes in the new zone exceed 4 millimeters (+5 mesh). Results from in-fill drilling in the area of known mineralization also demonstrate significant intersections at very high grades, including 21.7% gC over 16m (MD619).
The full impact of the discovery has yet to be established but has the potential to significantly enhance the economics of the Uley operation for Valence Industries. This area is a completely new area of mineralized pegmatite untouched by historical drilling and entirely in addition to the already known mineralization that forms the existing JORC (2012) Mineral Resource. This new area of graphitic mineralized pegmatite has been encountered from near surface at 25 meters dipping down to 120 meters and extending across a strike distance of ~75 meters.
The company named the unique graphite from this new zone Arterial Flake. The features of Valence Industries’ new Arterial Flake graphite include: A unique and exciting new geological discovery, easily accessed, found from near surface in soft dig material, very high grades exceeding 60%+ gC. Flake graphite grades like this over such significant intercepts have not been previously reported.
On October 6th, Lomiko Metals Inc., up 4.29%, announced that a drilling permit for the La Loutre Crystalline Flake Graphite Property has been issued. On September 23, 2014 Lomiko optioned a 40% interest in the La Loutre Crystalline Flake Graphite Property located in Quebec last month. A full set of results was reported in that news release.
The goal of the exploration program is to identify high-grade, near-surface graphite mineralization suitable for conversion to battery-grade graphite. Of particular interest to Lomiko was an area of the property which reported grab samples up to 22.04% Carbon Flake Graphite (CFG) and Carbon Purity Test results reporting up to 100.00% Carbon Purity in the Large and Extra Large Flake Graphite.
Graphite grab sample assay results derived from a recent sampling and mapping program has confirmed a graphite bearing structure covering an area approximately 7 kilometers by 1 kilometer with results of up to 22.04% graphite in multiple parallel zones of 30-50 meters wide. Another area has been identified covering approximately 2 kilometers by 1 kilometer in multiple parallel zones of 20-50 meters wide which includes results up to 18% graphite.
Graphite Market Review is a special weekly feature on InvestorIntel sponsored by Alabama Graphite Corp. (TSXV: ALP | OTCQX: ABGPF) and is written by US Analyst, Peter Epstein.
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