Resource World Magazine

44 www.resourceworld.com J U N E / J U L Y 2 0 1 7 CEYLON GRAPHITE CORP. [CYL-TSXV] has begun its exploration program on the island nation of Sri Lanka where the government has granted the company exploration rights in a land package of over 100 km 2 . The exploration grids cover all relevant areas that had historical graphite production during the early 20th century, representing the majority of the known graphite occurrence in the South Asian country. Ceylon's lump vein graphite is unique and is considered to have a higher quality than normal flake graphite and currently accounts for less than 1% of global graphite production. Many of the highest quality, electrical motor brushes and other current-carrying carbons are based on for- mulations using vein graphite. Ceylon Graphite has purchased a VLF EM16 receiver that will be utilized by its field crew for the ground exploration pro- gram. The company will explore each one of the 116 grids by conducting detailed electromagnetic mapping that should pro- vide the precise location(s) of the graphite vein(s) in each grid. The company also has a diamond drill rig on site that will drill the various veins. Drilling operations began in late April on the K1 site, testing down to about 100 metres in depth. The lump vein graphite deposit is at surface allowing for rapid and low capital costs for the company's plans for production. Ceylon Graphite's goal is to build a geological database for future NI 43-101 resource estimation and begin collecting bulk samples of lump vein graphite from grid sites in order to start a stockpile of graphite. In this context, the company has begun further site preparation of two high-priority grids. The team will also locate and identify historical artisan mining operations on some grids and use these as the base infrastructure as mining operations are developed. Bharat Parashar, CEO, said, "The EM16 will hasten the mapping of all of our grids, and this, coupled with our drill- ing program, will set the stage for Phase 2 production. Our goal is to start commercial production of graphite in the foreseeable future and then provide consistent quality and volume of the product." He added that sufficient CapEx and OpEx funds have been raised for the near term. Ceylon Graphite management anticipates that commercial production will commence by year end. It is estimated that the life- of-mine will be 26 years at a production rate of 18,000 tonnes of graphite per year. Mining extraction costs, including labour, are expected to be about $175 per tonne. The company will pay royalties to the gov- ernment of Sri Lanka equal to 5% of its gross revenue. The off-take price of Ceylon Graphite's mineral product will be $1,250 per tonne based on Industrial Minerals Flake, 94-97% C, +80 mesh, FCL, CIF Europe price. Ceylon Graphite also wishes to become involved with Corporate Social Responsibility and has plans to provide health and medical insurance for its employ- ees, work with charitable organizations to help with education and technical train- ing, donate laptops and tablets to the local community and create secondary business opportunities for manufactured graphite products in Sri Lanka. The project will also benefit from a five-year tax holiday. n Ceylon Graphite plans production in Sri Lanka MINING A sample of Ceylon Graphite's lump vein graphite mineralization collected from its property on the island nation of Sri Lanka. Photo courtesy Ceylon Graphite Corp.

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