Graphite market review - movement

  1. =V=
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    A snip of a summary on some of the leaders in the graphite world - see table. North America biased but Triton gets a mention.


    Graphite Market Review — The graphite sector was down -5.37% for the week ending September 19, 2014 based on the list of graphite stocks we are following listed below. Graphite stocks were not immune from the overall selloff in natural resource stocks. The selloff is in part due to the significant weakness in gold and silver, and iron ore and coal prices at multi-year lows isn’t helping investor sentiment either. The uranium spot price has risen 30% lately, but even that failed to move uranium stocks. China’s growth rate is slowing, and its housing market is showing continued signs of weakening, causing fears that demand for many commodities will remain weak into next year.

    Northern Graphite (TSXV: NGC) is an example of a delayed mine. It has a Bank Feasibility study completed, but can’t raise the capital to get started on construction. Importantly, many companies are forecasting production starts in 2017-18. Clearly there’s risk to those start dates being pushed back a year or more. However, even if we can get 6-8 or even 10 notably mines online, I think shortfalls are still likely. One reason, ramping up from initial production to nameplate capacity can take years as some companies will expand in phases. End users need to test new material, which can also take considerable time. Bottom line, I imagine that by the end of the decade there will be significant excess demand for graphite, lead by EV demand, and prices will be higher to reflect that dynamic.
    A takeaway is that the many junior graphite companies saying that they are suited to be one of the suppliers for the giga-factory, can relax and recognize that there will be plenty of demand for graphite in coming years.

    Alabama Graphite Corp. (TSXV: ALP | OTCQB:ABGPF) was up 10.9% & 4.3%, respectively on two news items. It announced on September 18th that it entered into a mineral lease on a land package that includes a prior producing Bama flake graphite mine and surrounding property. The company also signed a mineral exploration lease on several parcels comprising 1,160 acres adjacent to the Bama Mine. This gives Alabama Graphite two advanced stage projects that could share key infrastructure including a mill, exploration staff and sample prep facilities. Note: The last company that bought a past producing mine, Big North Graphite (TSXV: NRT), was acquired by Flinders Resources Ltd. within a year. Flinders itself brought a past producing mine in Sweden into production this summer.
    Alabama Graphite also reported on September 16th assay results from the summer 2014 sonic drilling program at its flagship Coosa Graphite Project. From the press release,
    “The Company’s existing NI 43-101 resource estimate identifies an indicated resource of 38 million tons at 2.60% Cg, the largest indicated flake graphite resource in the U.S. and an inferred resource of 27 million tons at 2.87% Cg. The assay results show two of the new anomalies with intercept grades of 3.27% Cg and 3.65% Cg. The results also indicate that the Company’s existing inferred resource can be upgraded and could potentially increase the overall grade of the resource.”

    Great Lakes Graphite Inc. (TSXV: GLK) was up 22.2% after reporting on September 18th that preliminary metallurgical testing of samples from the Company’s Lochaber Graphite Project in southwestern Québec demonstrated that a graphite concentrate containing over 57% large flakes can be produced. In addition over 45% of the concentrate was classified as jumbo flake. According to the press release,
    “these results confirm the outcome of previous testing carried out on diamond drill core samples by Rock Tech Lithium Inc. in 2013. This testing has also validated the performance of a new process flow sheet that can be incorporated into future economic and feasibility studies to be commissioned by the Company.”

    Graphite One Resources Inc. (TSXV: GPH | OTCQX: GPHOF) was down 3% and up 0.6%, respectively as it announced that it’s increasing the size of its previously announced private placement due to increased demand. Oversubscribed by $1,000,000, the gross proceeds including both tranches is expected to total C$5 million. Net proceeds will be used for exploration and development of the Company’s Graphite Creek project and for general working capital purposes. From the press release,
    “Graphite One is currently infill drilling Graphite Creek in 50m intervals, with the goal of converting a portion of the NI 43-101 compliant inferred resource to either the indicated and/or measured categories. Integration of this data will add significant value as the Company work towards a Preliminary Economic Assessment (PEA) over the upcoming months.”

    Energizer Resources Inc. (TSXV: EGZ | OTCQX: ENZR) was down 24.5% and 25.4%, respectively after a BIG move up the prior week, up nearly 70%. For the month to September 19th, ENZR was up 14.3% from $0.14 to $0.16, with lots of volatility in between. On September 17th, the company announced it has engaged an agent to conduct a brokered private placement of common shares to raise gross proceeds of up to US$4,800,000 with an issue price of US$0.14 per share. Note: although a below market capital raise, no warrants are attached.

    Flinders Resources Ltd. (TSXV: FDR) was down 13.3% for the week on no new news. The stock was one of the better performing stocks recently, but profit taking appears to be at hand. On Sept. 2nd the company announced the acquisition of Big North Graphite. Flinders is down 29% since the beginning of the month.

    Lomiko Metals Inc. (TSXV: LMR | OTCQX: LMRMF) was down 12.5% and 8.4%, respectively. On September 18th the company clarified its holdings of Graphene 3D (TSXV: GGG). Lomiko owns 4,396,970 shares, representing approximately 11.23% of the outstanding shares. Of these shares, 3,196,970 were acquired at a deemed price of $0.075 pursuant to a securities exchange agreement dated June 6, 2014 between, among others, Graphene 3D and Lomiko. Lomiko acquired the shares for investment purposes and does not intend to acquire additional shares. The market value of Lomiko’s investment in Grahene 3D was C$6.8 million on Sept 19th.

    Triton Minerals Limited (ASX: TON) was down 7.2%, inline with the market. On Sept. 16th, Triton confirmed receipt of the initial metallurgical and mineralogical results for the Nicanda Hill prospect. Triton Minerals’ Managing Director Brad Boyle said,
    “These preliminary metallurgical and mineralogical results are very encouraging for Triton, showing once again that a very high grade graphitic concentrate of up to 97.3% TGC is obtainable from straight forward flotation methods.”

    Northern Graphite Corp. (TSXV: NGC | OTCBB: NGPHF) was down 15.7% and 13.8%, respectively. There was no new news on the company.


    Last edited by =V=: 25/09/14
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