Resource World Magazine

Resource World - Oct-Nov 2016 - Vol 14 Iss 6

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36 o c t o b e r / n o v e m b e r 2 0 1 6 Graphite One advancing unique graphite deposit by Peter Kennedy In the highly crowded mineral exploration business, finding ways to stand apart from the competition has always been vital. But that is especially true for producers of graphite, an indus- trial mineral that has previously been tied to steel production but is gaining investor attention because of surging global demand for graphite used in electrical vehicle batteries, fuel cells, power storage and other emerging next generation applications. As there is no ready market for graphite (in the way that there is for copper and gold), the mineral is typically sold under con- tracts to end users who are seeking a specific type of graphite in order to meet their needs. Industry officials say the supply side of the business is so over concentrated, with China holding a 60% market share, that new mines must be developed in North America to meet the needs of Tesla Motors [TSLA-NASDAQ] and other emerging manufactur- ers of electric vehicle batteries. That is why Vancouver-based Graphite One Resources Inc. [GPH-TSXV] is working hard to establish itself as an innovative, integrated producer of specialty graphite products rather than becoming just another supplier of raw materials. "Three to five new graphite mines need to come on line over the next five years to support everything that is going on,'' says Graphite One CEO Anthony Huston. He aims to achieve that goal by exploiting the unique proper- ties of material that could be mined from his company's Graphite Creek Project located near Nome, Alaska. It already ranks as America's highest grade and largest known flake graphite deposit. Having already seen intermittent production since the early 1900s, Graphite Creek has a NI 43-101 compliant indicated resource of 17.95 million tonnes at 6.3% graphitic carbon with an inferred resource of 154.3 million tonnes at 5.7% Gg, using a 3% cut-off grade. Last year, Graphite One commissioned Toronto-consultant TRU Group to examine development options for its Graphite Creek Project. TRU's key role was to examine the distinguishing features of drill core samples from the property and match them with potential end users. The company said naturally occurring graphite in the shape of spheres and close to the size ranges that may be of interest to buy- ers of lithium ion battery grade graphite was seen in all drill-hole concentrate samples. Based on those conclusions, the company moved to trademark the term STAX, an acronym that reflects what the company says are the unique characteristics of graphite samples taken from the Graphite Greek property. Those characteristics are Spheroidal, Thin, Aggregate, and Expanded, or STAX. "Our spheroidal graphite is our main focus," said Huston. The company recently began product development tests on carbon- coated spherical graphite, which is used to manufacture the anode in a lithium-ion battery. The next step in the process will be the announcement of a Preliminary Economic Study (PEA) for the Graphite Creek property. The company recently raised $1.3 million from a non-brokered private placement offering that will be used to fund exploration and development at Graphite Creek and for final preparation of a PEA that is expected to be completed by the third quarter of 2016. The oversubscribed placement was comprised of 16.2 million units at $0.08 per unit. On September 8, 2016, Graphite One shares were unchanged at 9 cents, to trade in a 52-week range of 18 cents and 7 cents, leaving a market cap of $19.1 million based on 213 million shares outstanding. While Graphite One is still a number of years away from start- ing production, it could rank as one of only two US miners with the ability to supply spherical graphite. The other is Alabama Graphite Corp. [ALP-TSXV]. For its part, Graphite One is examining possible scenarios that might include developing an open pit at Graphite Creek and pro- ducing a graphite concentrate at the site that could be shipped by barge to manufacturing facilities (producing coated spherical graphite) in Seattle on the US west coast. "A key requirement in the process is low cost electricity and a skilled workforce,'' Huston said. Work with TRU Group suggest that spheroidized graphite from Graphite Creek STAX Graphite could potentially be much less energy intensive, and therefore less costly, to produce than con- ventional flake graphite. The company envisages producing in the range of 30,000 to 50,000 tonnes per year. More details about the economics involved in that level of production will be revealed in the PEA. n graphite One geologists inspecting black bedded graphite at the graphite Creek project near Nome, western alaska. photo courtesy graphite One resources Inc. miNiNg

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