IM Graphite News in Brief 12 – 18 June

By Laura Syrett
Published: Thursday, 18 June 2015

StratMin teams up with Tirupati in Madagascar; ex-Focus CEO moves to Alabama; Krakatoa closes in on Indonesian projects.

StratMin Global Resources Plc has signed a strategic partnership with privately owned Indian graphite miner, Tirupati Carbons and Chemicals Ltd, for collaborative graphite mining in Madagascar.

Under the terms of the binding deal, UK AIM-listed StratMin, which owns the operating Loharano graphite mine and plant in Madagascar, will earn a 45% interest in Tirupati’s subsidiary, Tirupati Resources Mauritius Pvt Ltd, which gives it a stake in the Vatomaina graphite project, also in Madagascar.

The companies will jointly fund the development of a 12,000 tpa mine and processing plant at Vatomaina, while StratMin will develop a second 12,000 tpa facility at its Mahefadok project, which is adjacent to Loharano, with technical support and investment from Tirupati.

Separately, StratMin announced that it has completed a preliminary scoping report at Mahefadok and said that testing of samples from the project have confirmed a strike 1.5km long and 150 metres wide. The company now plans to proceed directly to a bankable feasibility study for its planned 12,000 tpa plant.

Nearby, TSX-V listed DNI Metals Inc. has entered into a definitive agreement to buy a graphite exploration project in Madagascar through its subsidiary, DNI Metals Madagascar Sarl.

Pursuant to the agreement, DNI will acquire a mining permit for the property for $400,000 cash. The company has also agreed to issue 4m common shares for the exclusive right to negotiate the acquisition of the property.

Dan Weir, DNI’s CEO, recently told IM that he believed graphite projects in Madagascar had a stronger chance of succeeding than developments in other parts of the world, owing to the quality of the geology and the country’s history of graphite production.

DNI currently has a revenue stream from its partnership with fellow TSX-V-listed Great Lakes Graphite Inc., which it supplies with graphite from Brazil as a feedstock for Great Lakes’ micronisation facility in Matheson, Ontario.

In addition to its micronisation facility, Great Lakes is also developing the Lochaber graphite project near Buckingham in Quebec, where the company recently completed an inaugural resource estimate for 4.01m tonnes graphite at an average grade of 4.01% C, using a 2.45% C cut-off.

Last week, Great Lakes revealed it had formed a technology partnership with Ontario-based Process Research ORTECH to commercialise its process for purifying flake graphite to a grade of 99.9% C.

Also in Canada, Focus Graphite Inc. has parted company with its CEO, Don Baxter, citing "a significant divergence of vision".

Focus has nominated Gary Economo as its president and chief operating officer on an interim basis and said that it has begun recruiting for a replacement. The company is developing the Lac Knife graphite project in Quebec.

Baxter meanwhile has been appointed co-CEO and member of the board of directors of TEX-V listed Alabama Graphite Corp., which is developing the Coosa and Bama graphite projects in the US, state of Alabama.

Alabama Graphite this week announced a brokered private placement to raise up to Canadian dollar (C$) 2.5m ($2.04m*) from the sale of 12.5m units in the company at a price of C$0.20/unit.

Each unit is comprised of one common share in the company and one half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share in the company at an exercise price of C$0.35 for a period of 36 months.

The company used First Republic Capital Corp. as its agent for the placement and said it intends to use the net proceeds from the capital raising to fund drilling programmes at its Alabama properties.

Mason Graphite Inc. has selected the Jean-Noel Tessier Industrial Park in Baie-Comeau, Quebec, as the site of its proposed graphite processing plant as part of its Lac Gueret mining project.

The company said it selected the Baie-Comeau location owing to a range of benefits offered by the regional development corporation and Baie-Comeau City authority, which include a declining property tax credit over five year and a commitment by the city to enable the plant to connect to the local infrastructure.

Mason said that acquisition of the land at the proposed site is subject to certain conditions, including obtaining the requisite permits and approvals and construction financing. 

Staying in Quebec, Lomiko Metals Inc. and Canada Strategic Metals Inc. have started exploration at the La Loutre and Lac des Iles West graphite properties.

Phase one of the 2015 exploration work at La Loutre consists of a 5,000 metre delineation and definition diamond drilling programme to outline potential mineral resources, while mapping and sampling will be carried out at Lac des Iles to determine strike length.

ASX-listed Syrah Resources Ltd has reported that an initial economic assessment of its planned coated spherical graphite facility in the US has indicated initial capex requirements of approximately $80m, with annual cash operating costs of $3,200/tonne FOB for coated spherical graphite.

According to the company, the facility is set to be the largest of its kind in the world and will produce 25,000 tpa coated spherical graphite and 25,000 tpa 95% C recarburiser as a by-product. Feedstock for the plant will come from Syrah’s Balama graphite project in Mozambique.

The company said that feedback from samples set to major electric vehicle and battery producers indicated strong demand for the its material. Syrah added that, based on discussions with potential customers, selling prices for coated spherical graphite currently stand at $7,000-10,000/tonne.

Elsewhere, Krakatoa Resources Ltd has signs a heads of agreement deal for the option to acquire a 75% interest in two graphite projects in southeast Sulawesi, Indonesia, from Singapore-based Carbon Carbon Pte Ltd.

The Bone Bay and Laeya River projects are both on the Indonesian Department of Energy and Mineral Resources’ 'Clean and Clear’ registry, according to Krakatoa.

Bone Bay is a 99.48 ha (1km2) exploration site, located on the coastal road close to the port city of Kolaka. Laeya River, meanwhile, is situated close to the city of Kendari and covers 98 ha (0.98km2).

Krakatoa is proposing an initial four-to-five month exploration programme at Bone Bay.

In financial news, Ontario-based Northern Graphite Corp. has filed a preliminary prospectus with the Canadian securities regulatory authorities for a proposed offering of up to 3.906m units at a price of C$0.64/unit for gross proceeds of C$2.5m.

Each unit will consist of one common share and one half common share purchase warrant, with each whole warrant exercisable to acquire one common share at the company at a price of $0.80 per share for a period of 24 months.

Northern Graphite intends to use the net proceeds of the offering to fund ongoing permitting for the construction and operation of its Bissett Creek graphite project in Ontario.

*Conversion made June 2015