Graphite Weekly Review: Juniors at the Forefront
The natural graphite space is now increasingly populated by junior players. Synthetic graphite, the most expensive by far (up to ten times as much at current rates) is derived from high temperature processes involving calcined petroleum coke and coal tar pitch. Synthetic graphite varieties are used in applications where purity is essential and until recently only this ‘man made’ variety was able to achieve 99% purity or higher. However, advancing graphite purification methods, and above all, a literal burst of interest in flake graphite has vastly contributed boosting the availability of highly pure natural graphite. As noted in an article published last Friday, the Canadian province of Quebec is at the forefront of the emerging flake or crystalline graphite mining industry.
More and more companies are converging in this region, acquiring properties along the Grenville Geological province about three hours drive from Baie Comeau, Quebec. The region is mining friendly and offers excellent infrastructure and it is attracting more and more companies to its graphite deposits. The latest to arrive is Caribou King Resources Limited (TSXV: CKR), which announced, on February 25, having purchased three graphite properties all located along the Grenville belt. Caribou joins a host of other junior plays, all aiming for the most efficient way to extract and produce the highest purity graphite.
Graphite is slated to have an impact on technology no less significant than silicon from the 1950’s to the present. It is not typical for juniors to be at the forefront of a new technological trend but thanks to the development of, and demand for, flake graphite driven by accelerating battery technology, fuel cells, alternative energy and especially graphene. Touted as the new wonder material, graphene has sometimes taken on science fiction properties; however, the combination of unprecedented purity levels, as shown by such companies as Focus Graphite (TSXV: FMS | OTCQX: FCSMF) and Zenyatta Ventures (TSXV: ZEN) – both of which have achieved above 99% purity levels – suggests the future is upon us.
The year 2013 started with the announcement that the EU would invest over a billion dollars during the course of the year in graphene research. Last week, a German industrial alliance, meanwhile, launched an even more vociferous appeal to ensure access to a handful of critical resources; flake graphite is one of these. The German government has been urged to find a solution and Chancellor Angela Merkel hinted she may appoint coordinator to “adjust the best interests of the industries strategic defense technology and security, helping to ensure the supply of raw materials.” Germany’s defense goals, has urged the ‘industrial alliance’ should also be organized in such a way as to prioritize “security and access to natural resources”.
The context of this evolution of defense strategy is the intensification of the struggle for raw materials, especially with China. Alliance leader, Dierk Paskert, expressed discomfort at the fact that “China consumes nearly 40 percent of all raw materials while and their needs continue to increase drastically”. In a sense, the EU’s decision to sponsor graphene research to the tune of 1 billion Euros reflects such concerns. The nature of research itself, uncertain in its results, shows to the extent of graphene’s importance. The EU has been forced into acting courageously and graphene was chosen in a competition for funds that included a final selection round of six major projects. Graphene research has been bursting with ideas and discoveries but Europe had allowed itself to fall behind.
The average market performance of ProEdgeWire graphite sponsors showed an overall drop of 4.46%. Despite announcing a completion of metallurgical tests showing graphite recoveries of over 96% at the Lac Gueret graphite property, Mason Graphite Inc. (TSXV: LLG) dropped 6.9%. For the second week in a row, Zenyatta Ventures was the outperformer, adding 10.77% to its value, after a previous stellar week.