Resource World Magazine

32 www.resourceworld.com A U G U S T / S E P T E M B E R 2 0 1 4 MINING MINING Natural graphite has a variety of applica- tions: refractories, batteries, steelmaking, brake linings, foundry facings and lubri- cants to name a few. But more and more when we think of graphite we think of batteries. Tesla Motors' [TSLA-NASDAQ] recent announcement, that it plans to build a, "Gigafactory" the biggest battery factory in the world, is very good news for graphite explorers and developers. Panasonic [PCRFY-OTCPK] and Tesla Motors plan to work together on the development of the first "Gigafactory" somewhere in southwest, US. The $5 bil- lion Gigafactory will help supply and reduce the cost of battery cells for its elec- tric vehicles (EVs). This is big news to graphite explor- ers, developers and suppliers. Tesla said the "Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013." The resulting growth in graphite demand will be substantial. Industrial Minerals Data's June 2014 report, Tesla's $5bn Question, asks what the Gigafactory means for critical mineral demand. The report suggests that supply chains will have to be carefully reviewed, "to assure security and sustainability." China is the largest graphite producer hav- ing produced 60 to 70% of the world's supply over the last 25 years. The US has no producing graphite mines; Canada has two producing graphite mines. The Tesla announcement has reinvigorated inter- est in junior graphite companies in North America, with most of those companies exploring and developing graphite proj- ects in the Canadian provinces of Ontario and Québec. Gregory Bowes, CEO and Director of Northern Graphite said, "It has been reported that the Gigafactory would pro- duce enough batteries for about 500,000 EVs per year and that up to six new graph- ite mines will be required to supply it. I think there is a very good chance 500,000 EVs will be sold each year by 2017 regard- less of whether it is Tesla, or all other car manufacturers combined. The simple take- away is that it does not take many to have a significant effect on the graphite market. 500,000 cars is less than 1% of the annual new car market." The following companies are exploring, developing and mining for graphite. Alabama Graphite Corp.'s [ALP- TSXV; ABGPF-OTC] flagship Coosa Graphite Project in Coosa County, Alabama, is located in an area with significant historical production of crys- talline flake graphite. In May, Alabama Graphite announced that airborne TDEM/Magnetometer/Radiometric sur- veys help identify five new target areas. KLM Geoscience of Las Vegas, Nevada, commenced follow-up geophysics on the targets. Once the geochemical and geophysical data sets are integrated the company plans to initiate a targeted sonic drill program to identify targets for a comprehensive drill program in Q3. The company anticipates completing a bulk sampling program and a Preliminary Economic Assessment by the end of the year with the goal of being the first US company to be in production. On August 16, 2013, Alabama Graphite reported entering into an agreement to acquire a 100% interest in the Hearst Graphite Project, in Ontario, Canada, owned by Benton Resources Inc. Big North Graphite Corp. [NRT- TSXV] announced, on April 4, 2014, that it had completed its largest sale of graphite to date having shipped 403 tons of amorphous graphite to a customer in Mexico. The graphite was a combination of purchased product from feed mines in Sonora, Mexico and concentrate from Big North's Nuevo San Pedro Mine also in Sonora, Mexico. Big North's Aki Wiki graphite concession (100%-owned) and their Nuevo San Pedro Project (50/50 JV) are located in the San Jose de Moradillas region where graphite has been mined for more than 100 years. Big North recently acquired the past producing El Tejon flake graphite mine and mill in Oaxaca, Mexico. Callinex Mines Inc. [CNX-TSXV; CCLXF-OTCQX] recently announced that results from a winter drill program on its Neuron graphite property in northern Manitoba, Canada extends the previously reported zone of graphite mineralization. On May 26, 2014, Callinex reported a lib- eration analysis is underway to determine the characteristics and size of the flake TESLA's gigafactory reignites interest in graphite by Kathrine Moore

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