Great Lakes Graphite to get into the game earlier
The talk of late about batteries has been great for the graphite industry. The Tesla Powerwall batteries that Elon Musk wants to put into homes, to be powered by the sun, is being called the ‘democrizitation of energy.’ These batteries need a great deal of graphite, yet there has been no graphite produced in North America since 1991. For this reason Great Lakes Graphite Inc. (TSXV: GLK), is bringing in graphite from Brazil to be processed at their facility in Matheson Ontario.
After announcing news about progress towards commercialization May 28th, the stock rose from $0.10 to $0.14 CAD by June 1st, on the TSXV, enough for a 50% gain in the month of May.
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Graphite news has been everywhere lately, from Elon Musk, and the US Senate to numerous articles on InvestorIntel. The Lithium-Ion batteries that power Tesla’s electric cars, & the Powerwall batteries need many minerals including graphite. And in the US Senate this past month, it was pointed out that though there is no domestic production of graphite, it is used by over 90 US companies. Since most graphite comes from China, like rare earths, the US is eager to foster a domestic industry of this critical, strategic, import-dependent mineral.
Great Lakes Graphite have several deposits of graphite in Ontario & Quebec, including at Lochaber Quebec, only 30km from Ottawa. But the news that pushed their stock up regards the processing of low-cost graphite from Brazil. Test samples of the material have been sent out to clients and they plan to have graphite for sale by the next quarter, or later this year according to a conversation I had with Corporate Marketing Officer Paul Ferguson. They also announced news June 1st that they have brought in new staff to facilitate the new international side of their operations.
Before the May 28th news release the stock had been relatively even for months. It had been as low as $0.07 CAD on May 20th, doubling to $0.14 on June 1st, and was at $0.12 on June 3rd. The majority of the 50% gain for the month coming in the last two days of trading would seem to indicate that investors feel the news about processing supply from Brazil is great news. It is certainly going to be faster that way than processing their own deposits.
This vertically integrated supply chain is a must in the race to be able to provide graphite in North America. Building a processing chain for raw materials from abroad allows Great Lakes Graphite to gain expertise while they develop capital to bring their own deposits online.
That graphite is being used in many new clean tech applications like solar powered batteries for homes, and having the case made for a domestic industry within the US government is good news for companies like Great Lakes Graphite. While there are many deposits of graphite throughout Canada and the US, the fact that it is currently import-dependent, mostly from one country is a dependence the US would like to end. Being able to process supply from other countries while they develop their own deposits, might allow Great Lakes Graphite to get into the game earlier than most.
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