The TMR Advanced Graphite Projects Index

by Gareth Hatch on April 10, 2012 · 21 comments

in Graphite, Tools & Metrics

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Today we announce the launch of the TMR Advanced Graphite Projects Index, an objective tool for tracking the leading new exploration & development projects in the graphite sector. This follows a number of requests to create such an Index, similar to the one that we maintain for the rare-earth sector.

You can visit the new Index page by clicking here or using the short cut: www.graphiteindex.com.

While graphite appears to have come out of nowhere to become the new darling of the junior-mining investment community, it is an important industrial material with a wide range of uses.

Graphite has long been used as a lubricant, as a liner for furnaces, crucibles and lades in the steel industry, and in fire retardants, heat shields and brake pads. It is also used in pebble-bed nuclear reactors, photovoltaic cells for solar panels, carbon fibers, fuel cells and in so-called lithium-ion battery cells (which, the graphite project developers are always quick to tell us, contain far more graphite than they do lithium).

It is this latter application, plus the potential of the next-generation wonder material graphene (produced from sheets of carbon atoms just a single atom thick), that is driving the interest in new sources of natural-graphite supply. Graphite can be synthesized from coal and petroleum products, and synthetic graphite is used for a variety of the above applications. However, batteries and other growing uses of graphite frequently require the type of morphology only found in naturally occurring forms of graphite.

Three forms of natural graphite are of industrial interest: flake, amorphous and lump (or vein). So-called large-flake, high-purity graphite is of greatest interest to graphite junior-mining companies – analogous in some ways to the desire to find rare-earth deposits rich in the heavy rare earths. Large-flake graphite is of particular interest for the production of lithium-ion batteries.

In creating the TMR Advanced Graphite Projects Index, we took some cues from our Index for rare earths. You should note that we are primarily interested in graphite and other materials from the strategic point of view – i.e. in the furtherance of the needs and demands of the overall technology supply chain. We are less interested in finding “five bagger” investments and more interested in projects that are going to actually produce metals and materials. I make no apologies for this fact.

The TMR Advanced Graphite Projects Index consists of natural-graphite projects currently underway around the world, which have been either:

  • formally defined as mineral resources or reserves under the guidelines of a relevant scheme such as NI 43-101 or the JORC Code; or
  • are past-producing mines, with historical estimates that are actively being updated to comply with a relevant scheme.

The first iteration of the Index consists of 7 advanced graphite projects, associated with 8 different companies and located in 3 different countries:

  • Bissett Creek in Ontario, Canada is being developed by Northern Graphite Corporation (TSX.V:NGC, OTCBB:NGPHF). The company recently completed a Preliminary Economic Assessment (PEA) of the project. It has a NI 43-101-compliant mineral-resource estimate, with 26.0 Mt of the resource at the Indicated level @ 1.81 wt% CG and 55.0 Mt at the Inferred level @ 1.57 wt% CG (both at a cut-off grade of 0.99 wt%);
  • Kearney in Ontario, Canada is being developed by Ontario Graphite Co. The Kearney mine previously produced graphite until 1994. The project has a NI 43-101-compliant mineral-resource estimate, with 18.3 Mt of the resource at the Measured level @ 2.35 wt% CG, 25.7 Mt of the resource at the Indicated level @ 2.33 wt% CG and 12.3 Mt at the Inferred level @ 2.42 wt% CG (each at a cut-off grade of 1.5 wt%);
  • Kringel in Gävleborg, Sweden is being developed by Flinders Resources Ltd. (TSX.V:SGH). The Kringel mine previously operated between 1996 and 2001. The project has a historical mineral-resource estimate of 6.9 Mt @ 8.8 wt% CG, at an undisclosed cut-off grade and its present owners are in the process of upgrading those resources to be compliant with NI 43-101;
  • Lac Knife in Quebec, Canada is being developed by Focus Metals Inc. (TSX.V:FMS, OTXQX:FCSMF, F:FKC), which will soon change its name to Focus Graphite Inc. It has a NI 43-101-compliant mineral-resource estimate, with 0.64 Mt of the resource at the Measured level @ 15.6 wt% CG, 4.3 Mt of the resource at the Indicated level @ 15.7% CG and 3.0 Mt at the Inferred level @ 15.6 wt% CG (each at a cut-off grade of 5.0 wt%);
  • Nunasvaara in Norbotten, Sweden is being developed by Talga Gold Limited (ASX:TLG) and a subsidiary of Teck Resources Limited (NYSE:TCK), on which Talga has an 100% purchase option. The project has a JORC-compliant mineral-resource estimate of 3.6 Mt at the Inferred level @ 23.0 wt% CG, at a cut-off grade of 5 wt%;
  • Raitajärvi in Norbotten, Sweden is being developed by Talga Gold Limited (ASX:TLG). It has a JORC-compliant mineral-resource estimate of 0.5 Mt at the Inferred level @ 10.8 wt% CG, at a cut-off grade of 5 wt%;
  • Uley Main Road in South Australia, Australia is being developed by Strategic Energy Resources Ltd. (ASX:SER), which has signed an Implementation Deed with Mega Graphite Inc. for the acquisition by Mega Graphite of the project. The Uley mine previously operated until 1993. The project has a JORC-compliant mineral-resource estimate, with 4.3 Mt of the resource at the Indicated level @ 9.4 wt% CG and 2.3 Mt at the Inferred level @ 7.5 wt% CG (both at a cut-off grade of 3.8 wt%).

(N.B. all project information summarized above originates from the respective project owners). 

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Sign up today for free updates to the TMR Advanced Graphite Projects Index, and for future TMR commentary & analysis on the graphite sector.

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We’ll update the Index on a monthly basis, as information on new projects becomes available. At present we are aware of an additional two projects in Canada and one in Australia that may be eligible for inclusion on the Index; more to follow on those. Feel free to use the sign-up box above, or on the Index page, to subscribe to free updates to the new Index, and to get notifications on new commentary and analysis from TMR, on the graphite sector.

FYI, in addition to those projects on the Index, TMR is now tracking over 100 other graphite projects under development, associated with a similar number of companies in over a dozen countries outside of China.

You can access the Index page here.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of nor a consultant to any of the companies mentioned above.

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1 andrew citsay April 10, 2012 at 9:21 pm

Why is ENZR not included in your index?

2 Gareth Hatch April 10, 2012 at 9:25 pm

@andrew citsay: because it does not meet either of the criteria for inclusion, stated above. My understanding is that Energizer Resources is working on producing an NI 43-101 compliant mineral-resource estimate for the Green Giant graphite project in Madagascar, but that it won’t be available until later this year.

3 Robert Gill April 10, 2012 at 9:50 pm

Hi Gareth

My understanding is that there are different grades of graphite, the most sought after and valuable being large-flake graphite. Could you refine your list to include the type of graphite at each company, and maybe break it down for us about the relative prices for each type and the market size for each type?
Thanks

4 Gareth Hatch April 10, 2012 at 10:23 pm

@Robert Gill: we’ll definitely be providing more coverage on graphite. In the near future we’ll add more metrics of the type that you mentioned, as we’ve done for the rare earths, so that we can compare and contrast the projects on the Index. At this time, however, not all data appears to be available for each project, so we’re working on getting that.

5 blackjack April 10, 2012 at 10:24 pm

yes I agree
same like REE’s theres HREE’s and LREE’s at different price and qtys.

Graphite has 3 types flake, amorphous and lump (or vein) all at different prices and qtys. So perhaps a graph showing these properties would be helpful.

thanks – a good read.

6 Steve Moriarty April 11, 2012 at 12:09 am

Gareth,

Congratulations on the new site. Graphite is definitely a material for the future.

I look forward to further developments.

regards
Steve

7 optionsgirl April 11, 2012 at 4:58 am

Thanks, Gareth, for expanding your service to include graphite.
OG

8 Tekton April 11, 2012 at 9:36 am

Gareth,

I think that keeping up with the technology of Graphite will be even more chllenging than the REE sector has been over the past few years. Glad to see you’re getting a quick start on this sector, and it is most welcome. Congratulations !

9 robit April 11, 2012 at 11:40 am

Yahoo just linked this news to FMS.v
>> April 11 – Zimtu Capital Corp. is pleased to announce that the Company and three prospecting partners have signed an agreement with Big North Graphite Corp. (NRT.V) whereby Big North can earn a 100%-interest in the Grand Lac Du Nord Graphite Property located in Quebec . The Grand Lac du Nord Graphite Property consists of one contiguous claim block totaling approximately 2,009 hectares (20.09 km2) located approximately 140 kilometers northwest of Sept-Iles, Quebec …..snip

There is the city of Sept-Iles showing up again :-)

http://finance.yahoo.com/news/zimtu-capital-corp-announces-transaction-130100098.html

10 Leon Think April 11, 2012 at 12:04 pm

Gareth,
Graphite is a high-tech mineral and has lots of exciting applications, I will keep an eye on it!
You’ve done VERY GOOD JOB!

11 E. Lee Huston April 11, 2012 at 5:23 pm

Hi Gareth,
Today’s Critical Metals Report attributed to Kevin Puli says tons of graphite will be required for Vanadium flow battery systems. Flow battery storage capacity depends on the quantity of reactants (i.e. V) on hand. Any idea where the large graphite requirement comes from?

Thanks for organizing the Graphite Index.

— Lee

12 Kyle April 11, 2012 at 6:29 pm

Hi Gareth,

Hope you are well.

Thanks for adding graphite, it definitely deserves it’s place with the REEs and good to know someone with competence is covering the area.

And to whoever mentioned FMS on one of the comment threads of Gareth’s article about a year and a half ago….thanks :)

Cheers,

Kyle

13 Goran April 12, 2012 at 5:49 am

I fully agree with others, this is a great add to your already impressive portfolio. Even though small in sustainable and valid miners, graphite is the material for the future.

Keep on with good job, both of you.

14 zmotoyama April 12, 2012 at 5:39 pm

Hi Gareth,

Great job.

Jack at one time said that one should not forget the Chinese Graphite companies if one were interested in Graphite. Why are any of them included in the index ?

Always appreciate your advice

15 Anon April 13, 2012 at 9:22 am

Thanks for the article, I’ve been following the space for a while and have been n Northern Graphite since its IPO. It’s done very well and I look forward to their getting into full production.

There are a few other companies that have come to my attention over the last month or so that are in the very early stages of development:

Standard Graphite (DARDF)

First Graphite (IAXFF)

Big North Graphite (NRT)

I would not jump in on any of these yet, it’s too early, but there worth keeping an eye on. And lets not forget…

GrafTech (GTI) …a different way to play the graphite space.

16 Anon April 13, 2012 at 12:09 pm

One more graphite miner entering the space:

Zenyatta Ventures (ZEN.V)

http://finance.yahoo.com/q?s=zen.v

17 Faye M Smith April 16, 2012 at 8:49 am

I believe Ontario Graphite was bought by Standard Graphite SGH.V and pink sheet DARDF

18 Boris April 17, 2012 at 3:35 pm

Hi Gareth
I need a piece of advice and maybe a different view in order not to make a fool of myself in public (since I am only a techie and not financial analyst). Following this discussion last couple of days on Graphite Projects had a look into some of those companies:
Nothern Graphite Corp : P growth 2012 200 %, high P/B = 20, no profit
Flinders Resources: P on end 2011 level, no profit
Focus Metals: P growth 100 % since end 2011, P/B= 4,3, no profit
Talga Gold: P/B= 3,2. , no profit, P growth 2012 100 %.
Ontario Graphite: NA
Teck resources: P/E=8,6 in P/B=1,2., high profit, most of turnover in Asia ( will probably go down since Chinese GDP growth (only) 8,1% ??)
Mega Graphite: Private
Strategic Energy Resources: High P/B, no profit
China Carbon Graphite Group: Debt (61,7 mUSD debt over 49,2 mioUSD capital), P/E= 6,9; P/B=0,4, Mcap 21 mioUSD, turnover 50 mioUSD, profit 3 mioUSD
GrafTech International: P/B na= 1,27 , nice profit, low debt , Mcap 1,7 bilUSD, turnover 1,3 bilUSD, profit 153,2 mio USD .
SGL Carbon AG: P/E= 31,7, 73,2 mio € profit at 2,4 bil € Mcap.
I always thought Low P/B, low P/E, low debt, high profit and no high P growth (stable P) last couple of months were parameters to buy. Now out of upper bunch I would buy only China Carbon or GrafTech. For others seem already too late? What is that I do not see?
(note: I realise that these are kindergarten questions for financial analyst, but I do not want to leave this world completely ignorant)

19 Mandrake April 18, 2012 at 10:30 am

Ironically when one looks at the myriad of technological possibility for graphene one can’t feel that as Jack Lifton’s article on graphite flakes that diamond in the rough Graphite is to 21 rst century what coal was the industrial age. The paradigm shift is coming.

20 Geoff Alford October 16, 2012 at 7:36 pm

Gareth,

Is Focus Graphite already well down the track to becoming a significant and vertically-integrated mine-to-end product producer of graphene applications, or is it all inflated PR?

This my understand from researching the web.

Focus Graphite Inc. is a Canadian junior explorer and owner of the 16% carbon grade Lac Knife crystalline flake graphite deposit located in the Côte Nord region of Quebec. That is 16% of the world’s known deposits of high grade graphite.

Focus Graphite is fast-tracking the exploration program at Lac Knife with the aim of developing one of the lowest cost producers of industrial and technology-grade graphite in the world. A NI 43-101 compliant resource estimate on the project was completed in December 2011.

As a junior explorer with significant cash holdings, our company is poised to assume a leading position for graphite supply on a global scale and plans an aggressive program of acquisition, mergers and joint-venturing.

Focus Graphite is collaborating on Graphene research with Grafoid (of which it owns 40%).

Grafoid is a private company based in Canada that aims to produce graphene on a commercial scale using their proprietary extraction process. The company is also active in high-growth, scalable graphene projects, patents and material applications.

Focus Graphite provides Grafoid with its high-quality Graphite. Grafoid is also co-developing graphene-based polymer and non-polymer applications with Rutgets University.

21 Geoff Alford October 16, 2012 at 8:14 pm

Gareth,

Syrah (SYR.asx) is the darling of graphite among Aussie investors.

SYRAH RESOURCES LTD.

Syrah Resources (ASX code: SYR) is an Australian resource company with a diversified exploration portfolio located in southeast Africa. The company is rapidly progressing its core Balama Graphite Project in Mozambique, with the aim of establishing an initial mineral resource in the March quarter, 2013.

SER has fallen out of favour, haing been messed around by MEGA. There is some feeling that this may be resolved soon and the Uley resources return to SER

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