EDITOR: | October 28th, 2014 | 5 Comments

Strong graphite market news flow sets the pace for a market turnaround

| October 28, 2014 | 5 Comments
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ALP-ABGPFGraphite Market Review: Of the graphite stocks InvestorIntel tracks, market performance for the week ended October 24th was up for the first time in at least 4 weeks, by +3.88% versus InvestorIntel members that were up +5.05%. There was a number of outsized positive performers in the past week. Kibaran Resources Ltd. (ASX: KNL) was up 35.00%. Zenyata Ventures Ltd. (TSXV: ZEN) (OTCQX: ZENYF) was up 21.11% and 22.41%, respectively. Focus Graphite Inc. (TSXV: FMS) (OTCQX: FCSMF) was up 18.42% and 20.66%, respectively. Triton Minerals Limited (ASX: TON) was up 12.70%. Elcora Resources Corp. (TSXV: ERA) was up 11.11%.

Graphite Market Review, for the week ending October 24, 2014 – On October 21st, Triton Minerals Limited (ASX: TON) announced its maiden JORC compliant resource estimate for the Nicanda Hill graphite deposit at the Balama North project in Mozambique. The total Mineral Resource estimate comprises 1,457 Million Tonnes “Mt” at an average grade of 10.7% Total Graphitic Carbon “TGC” and 0.27% vanadium classified as either Inferred Mineral Resources or Indicated Mineral Resources. 328 Mt were classified at 11.0% TGC and 0.26% vanadium and 1,129 Mt were classified at 10.6% TGC and 0.27% vanadium. According to the company, Triton Minerals now has the single largest known graphite deposit in the world as well as one of the largest vanadium deposits.

Triton Minerals Managing Director and CEO Brad Boyle said,

“This is a tremendous result for the Company, as Triton has successfully defined the largest graphite and vanadium deposit in the world – only 6 months from the commencement of drilling at Nicanda Hill.It was evident from the drilling data received to date, that it confirmed the geological continuity at Nicanda Hill and together with the consistency of the graphite grades provided Triton the opportunity to undertake and complete an initial mineral resource estimate well ahead of schedule, with the remaining data to be used to upgrade the classification of the initial mineral resource estimate. This impressive result has confirmed the true world class potential of the Balama North project. Triton is now one step closer to becoming a market-leading low-cost graphite and potential vanadium producer.”

On October 21st, Mason Graphite Inc. (TSXV: LLG) (OTCQX: MGPHF) announced that a pilot plant test for the Lac Guéret graphite project has been initiated at COREM’s research facility in Quebec City. The operations are under the supervision of engineering firm Soutex, also based in Quebec City.

The pilot program is planned to operate for a six week period, during which COREM will test a bulk sample of approximately 60 tonnes of graphite mineralization obtained from Mason Graphite’s Lac Guéret property, located in northeastern Quebec. The average head grade of the bulk sample is 29.1% Cg. The pilot program is designed to test the concentration process developed at the laboratory level by Mason Graphite, COREM and Soutex.

Samples collected during the pilot will serve multiple purposes, including, testing of additional processing technologies, characterization for the upcoming environmental impact assessment, testing to create value added products such as spherical graphite used in lithium-ion batteries and testing with key potential customers.The results of the pilot plant program will also be used for the upcoming feasibility study.

On October 20th, Focus Graphite Inc. (TSXV: FMS)(OTCQX: FCSMF) announced that significant widths of graphitic mineralization ranging from 95 to 110 meters in thickness were intersected in a new zone at its wholly owned Lac Tétépisca Project southwest of the Manicouagan reservoir in Québec. Four fences of holes were spaced 200 metres apart, covering a 600-metre strike length of this new zone in a drill program designed to test surface mineralization found in trenches down to a vertical depth of approximately 100 metres.

The “Manicouagan-Ouest graphitic corridor” was discovered by Focus in 2012 and then exposed and channel sampled in two trenches in the fall of 2013. Assays up to 88.5 m @ 12.82 % graphitic carbon (“Cg”) and 84 m @ 11 % Cg were obtained. The 2014 drill hole assay results are pending.

Preliminary metallurgical characterization of a 10kg composite sample achieved a carbon content averaging 94.7% total carbon (“Ct”) for all flake above 200 mesh, including 97.7% Ct for plus 80 mesh flake – a quality that is critical to the lithium ion battery market. The concentrate was produced by only a three-stage cleaner flotation test. This suggests that the impurities are loosely attached to the surface and perimeter of the flakes and are not embedded within the graphite mineral layers of individual flakes, similar to what has been shown at Lac Knife. The concentrate grades could be further improved through secondary polishing and cleaning as was shown to be the case with the Lac Knife concentrate.

Don Baxter, P.Eng., President and COO of Focus Graphite said,

“We are very excited about these drilling results that confirm significant widths of mineralization at depth and the potential that this property may hold. Together with the positive, preliminary metallurgical test results yielding high carbon content of medium and fine flakes, our Lac Tétépisca project is very promising. So far it compares favourably in terms of length, width and grade to our Lac Knife graphite deposit. We are able to apply our operational and metallurgical experience, and what we have learned from developing the Lac Knife spherical graphite to the Lac Tetepisca project. Early indications are that it may produce a similar high quality product. At Lac Knife we have shown that we can take the less desirable finer sized flake concentrates and transform them into a 98% carbon concentrate that is potentially higher valued. This product is in high demand for lithium ion batteries.”

A Scoping Study will begin immediately to examine a production scenario of 30,000t of flake graphite per annum and expanded scenario of 65,000tpa, based on the Indicated Resource area and Duwi’s world-class large flake metallurgical properties.

On October 23rd, Kibaran Resources Ltd. (ASX: KNL) announced it has executed a Letter of Intent (LOI) with German company ThyssenKrupp Metallurgical Products GmbH, a subsidiary of ThyssenKrupp, to develop an exclusive, long-term commercial agreement for the sale of Kibaran’s natural flake graphite products. ThyssenKrupp is a major German integrated materials and technology company. Highlights include; the development of an exclusive long-term commercial agreement between the parties for the sale of an initial and minimum 20,000 tpa of natural flake graphite products in Russia, Korea and the EU 27 and a term of 10 years. ThyssenKrupp Metallurgical Products will endeavour to assist Kibaran to obtain debt or equity funding for development of the graphite projects.

On October 22nd, Nouveau Monde (TSX: NOU) announced results from the first scoping-level metallurgical test for the Hotel block, Matawinie graphite property. One 10 kg sample collected was submitted to SGS laboratories in Lakefield, Ontario, with the goal of generating a graphite concentrate by means of flotation, and thereby assessing the metallurgical response of the ore to the typical crushing, grinding and flotation processes employed in the industry. A parallel objective was the characterization of the concentrate in regards to carbon grade and recovery, as well as graphite flake size distribution. No thermal or chemical purification was carried out on the flotation concentrate.

The calculated carbon head grade for the sample was 7.0% Ct. The scoping-level flotation test upgraded the material into a graphite concentrate grading 96.3% Ct. Size fraction analysis of the final flotation concentrate revealed that 60.3% was composed of large flake graphite (greater than 80 mesh), at an average carbon grade of 98.5% Ct. A total of 30.1% of the final concentrate falls in the Jumbo flake category (greater than 48 mesh), with an average grade of 99.1% Ct. The table below summarizes flake size distribution and carbon grade of the greater than 150 mesh size fraction, which contains 76.8% of the graphite mass at an average grade of 97.9% Ct.

On October 21st, Sovereign Metals Limited (ASX: SVM) reported that further independent metallurgical testwork on the major Duwi Flake Graphite Project confirms the outstanding coarse flake characteristics of the Project. The testwork program undertaken by SGS Canada Inc. (“SGS”) at its laboratories in Lakefield, Ontario, has further confirmed the potential of the Duwi deposit to yield a commercial flake graphite concentrate with a high proportion of the valuable Extra Large and Large flake categories. Highlights include, results of metallurgical testwork undertaken by Mintek in 2013 were reproduced, excellent coarse flake distribution of Duwi fresh rock concentrates confirmed, definitive bench-scale variability test work program has commenced, upscaling test work has commenced to produce larger quantities of concentrates for testing by various graphite consumers and distributors.

October 23rd, Canada Carbon Inc. (TSXV: CCB) reported that the VN6 showing, first mentioned in the press release dated September 24, 2014, has become the most significant graphite zone identified since the acquisition of the Miller Project. The VN6 showing is associated with other previously reported graphite mineralization, identified as VN4, VN5 and VN6 Extension. All of these showings are inside a 155 meter long corridor. The 155 meter long corridor aligns perfectly with a 250m long conductive Induced Polarization, “IP” anomaly modelled at 5 meter depth. When combined with conductive zones identified at 20 and 40 meter depths, the conductive anomaly extends for over 700 meters, reaching the historic Miller Mine Pit to the north and the E3 airborne anomaly to the south. This conductive anomaly is open to the northwest and to the southeast, at the boundaries of the IP grid.

Conclusion: A positive week for the graphite stocks that InvestorIntel tracks is potentially a confirmation that indeed the bottom has been hit, as we look forward to a holiday market turnaround. Graphite Companies continue to set pace with an strong positive news flow, but are not necessarily being rewarded in the stock market yet. Hopefully, that has started to change with last week’s +3.88% positive performance.

2014-10-24-GraphiteMktReview

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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Comments

  • Nik

    Any chance of adding Graphite producer Stratmin Global Resources to that list? LON:STGR

    thanks

    October 28, 2014 - 12:24 PM

  • Tracy Weslosky

    Thank you for the recommendation Nik — we will review. And thank you for visiting InvestorIntel. PS. I am really proud of this Graphite Market Review, and would like to add a special thanks to Alabama Graphite Corp. (TSXV: ALP | OTCQX: ABGPF) who is making this is reality. Having an unbiased overview of the sector that keeps us all up-to-date is beneficial for all of us. Peter Epstein is an excellent analyst and professional writer — and well, great work makes me happy and reinforces why I love what I do.

    October 28, 2014 - 1:05 PM

  • SteauaOilers

    I almost couldn’t believe my eyes when I read that Canada Carbon is mentioned in the weekly report 🙂

    It shows that Peter and Tracy are open minded after all, good to know and kudos to them.They now join Gareth Hatch, Luisa Moreno and Jon Hykawy who wrote extensively about Canada Carbon after their individual site visits.

    October 28, 2014 - 1:33 PM

  • Ernest

    Thank you for a very good overview of the graphite market. My interest is Kibaran who seem to have an excellent resource and early production schedule.
    In the world of resources, the time line to production seems to be overlooked for the end of that line is where the profit should lie!!!

    October 28, 2014 - 7:36 PM

  • Good ZEN and high DVR performance not enough to drive graphite sector in October | InvestorIntel

    […] Strong graphite market news flow sets the pace for a market turnaround – Peter Epstein […]

    February 6, 2015 - 4:24 PM

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