Graphite – The New Black

THE BOURSE WHISPERER: The steady rise in the popularity of graphite as the new must-have commodity for mining companies shouldn’t really be any great surprise.

One of the main reasons graphite is experiencing a surge in popularity at present is its use in lithium-ion batteries.

If you’re not overly familiar with the lithium battery take a quick inventory around your house to see if you have any of these items.

–    Television remote control – any remote control for that matter;

–    Digital camera;

–    Computer – let’s use this as an umbrella term for all hand held screen-based devices as well;

–    Telephones – the ones your teenage children have to teach you to use because they don’t come with instruction booklets; and

–    Basically anything powered by batteries, which are recharged by plugging them into an electric socket.

All these devices multiplied by the number of your friends, neighbours and relatives with similar stockpiles of 21st century devices we must have to make our lives simpler results in an answer that represents a lot of batteries.

Electric / hybrid cars are also tipped to have a large impact to the global demand for graphite.

Although there already seems to be plenty of these machines buzzing along our freeways it is suggested that only two per cent of all new vehicles sold currently are gas-electric hybrids, plug-in hybrids or battery-only full-electric drive.

Ironically, the technology in most of these vehicles has yet to catch up with itself and most are manufactured with nickel-metal hydride batteries.

Sales of these vehicles are projected to move quickly and by 2020 are expected to account for anywhere between five to 18 per cent of all sales and, importantly will be almost exclusively powered by lithium-ion batteries.

If the global investment community loves anything it is a trend.

Just mention rare earths to people and their ears prick up. Not that they understand what rare earths are or what they do or where they come from but they’re interesting at the moment, other people are investing in them and we all want to be in early.

Hell, look what happened to gold. Remember when it was $500 an ounce?

This probably explains why we are seeing a sudden graphite rush on the market with each day presenting more companies that have suddenly realised they have recorded an intersection of graphite somewhere on their tenements.

Iron ore was popular as long as China wanted to build things and gold still holds a glistening appeal to those of us with mattresses too small to cope with large wads of cash.

Recent graphite movements

Kibaran Resources has prospective graphite and nickel projects located in Tanzania.

The company recently acquired the rights to the Mahenge and Merelani-Arusha projects, which it considers to be highly prospective for commercial graphite.

The company announced this week preliminary testwork has revealed strong graphite potential at Mahenge and Merelani-Arusha.

Results at both locations identified the presence of coarse graphite flakes.

As the company explained this is a desirable attribute of commercial importance as the larger the graphite flakes, the more valuable the graphite product becomes.

 

Source: Company announcement

“These solid results from preliminary metallurgical testwork are very encouraging,” Kibaran Resources chairman Simon O’Loughlin said in the company’s announcement to the Asutralian Securities Exchange

“The relatively high grade results and evidence of coarse graphite flakes indicate the commercial potential of our graphite projects.”

Kibaran Resources has commenced a three month drilling campaign at both projects.

The company said it has a six month exploration and development plan in place with the aim of proving up of a JORC Mineral Resource.

Castle Minerals announced a Maiden Resource for its Kambale graphite deposit in north-west Ghana of 14.4 million tonnes at 7.2 per cent graphitic carbon for 1.03 million tonnes of contained graphite.

The Resource includes six million tonnes at 8.6 per cent graphitic carbon for 0.52 million tonnes of contained graphite.

Castle Minerals managing director Mike Ivey said the maiden resource had confirmed Kambale as a major graphite deposit.

“We drilled our first hole in March this year and it is a great result to announce a maiden resource within four months,” Ivey said in the company’s ASX announcement.

“Kambale ranks as one of the largest graphite deposits in the world. Our initial metallurgical test work reports up to 69 per cent occurring as fine to coarse graphite providing excellent potential for a high value product to be produced.

“With less than 20 per cent of the graphitic schist horizon tested we clearly have potential to materially add to the current resource.”

Castle said it had on-strike drilling underway and will continue this along with further metallurgical test work to determine flake recoveries towards completing a prefeasibility study as soon as possible.

Gold Anomaly announced a graphite deposit located within the company’s Golden Gate project at Croydon, North Queensland.

The Golden Gate deposit contains 20 million tonnes at 5.5 per cent graphite, including a high-grade zone of six million tonnes grading 10 per cent graphite.

 

Location Map of the Golden Gate and Jolly Tar Graphite deposits
and their relationship to regional infrastructure and major mining
operations. Source: Company announcement

The company explained these estimates are historical results reported by Central Coast Exploration (CCE) that require substantiation by further drilling, assaying and metallurgical testwork.

“The company has certainly been active in identifying the graphite potential of our Croydon prospects and nearby areas, and now has the opportunity to add further value to our Croydon project assets,” Gold Anomaly executive chairman Greg Starr said in the company’s ASX announcement.

Cullen Resources has applied for ground over six known graphite prospects in Finland.

The company said a number of the prospects include airborne EM anomalies and reported historical drill intersections, such as:

–    7.6 metres at 34.8 per cent graphitic carbon and 99.55 metres at 12.1 per cent graphitic carbon for further investigation.

Cullen has now lodged three Ore Prospecting Licence applications (Exploration Licence equivalents) and four Claim Reservation applications over six graphite prospects in the name of its wholly-owned, Finnish-registered subsidiary company.

 

Source: Company announcement

These prospects have previously been explored for graphite and/or base metals by the Geological Survey of Finland (Geologian tutkimuskeskus or GTK) and companies, mostly in the period 1970-2000.

The historic work done by GTK was aimed at the potential of graphite as a fuel source.

Graphite’s metallurgical characteristics for other industrial uses were not, or only partly, investigated.

Existing databases for these graphite prospects include aerial and ground geophysical surveys, geological maps and diamond drill cores stored at the Geological Survey of Finland.