IM Graphite News in Brief 24 – 30 July

By Laura Syrett
Published: Thursday, 30 July 2015

GrafTech Q2 loss widens from 2014; Alabama commences PEA; Graphene Lighting to list in Canada.

Synthetic graphite products manufacturer GrafTech International Ltd recorded a net loss of $23m, or $0.17/diluted share, for the second quarter of this year. On an adjusted basis, the loss stood at $17m for the period, compared to a loss of $6m for Q2 2014.

Net sales fell by 42% year-on-year (y-o-y) to $284m, driven by lower shipment volumes and pricing across the business.

"Persistent weak demand in the global steel market has created a very challenging environment for the industrial minerals segments," said Joel Hawthorne, GrafTech’s CEO, referring to a drop in sales to $125m for Q2 2015, down from $207m the previous year.

"Graphite electrode demand has declined further as end market weakness continues and as global electric arc furnace steel production has been partially displaced by Chinese steel exports," he added.

GrafTech’s engineered solutions segment, meanwhile, recorded a drop in sales to $40m from $78m y-o-y, which the company attributed to lower sales of advanced electronics technology products.

Canada-based Focus Graphite Inc. has issued a statement clarifying certain disclosures relating to its Lac Knife graphite project in Quebec, Canada, contained in previous news releases.

In a release dated 25 June 2014, Focus reported a mineral reserve estimate without stating whether the mineral reserve was included in, or excluded from, the mineral resource contrary to section 2.2(b) of NI 43-101 requirements. The company also omitted to state the reference point at which the mineral reserve is defined.

Focus clarified that Lac Knife’s mineral reserve is included in the measured and indicated resource of 9.576m tonnes grading 14.77 C and that the reference point for the mineral reserve estimate is the mill feed.

The company also said that the use of the phrase "NI 43-101 compliant", jused in a 28 January 2014 release, was potentially misleading when referring to mineral resource or reserve estimates or technical studies.

Two further clarifications, one relating to section 2.2(b) of NI 43-101 in December 2014 and another relating to the use of terminology in Focus’ corporate presentation were also issued and the offending documents were amended in line with Ontario Securities Exchange requirements.

TSX-V-listed Alabama Graphite Corp. has begun a preliminary economic assessment (PEA) of its Coosa graphite project in Alabama, US.

The company has engaged AGP Mining Consultants Inc. to conduct the PEA, which is expected to be published in Q4 2015.

Objectives as part of the assessment include completion of a scoping study, estimating the potential value of the project as well as operating and sustaining costs and a conceptual timeline for the development of the project.

Canada Strategic Metals Inc. and Lomiko Metals Inc. have released the results of 40 surface samples taken from the La Loutre graphite property in Quebec, of which 13 had grades ranging between 20.3% C and 27.6% C.

A further 19 samples yielded grades between 10.25% C and 19.65% C, meaning that 32 of the samples graded at over 10% C – a proportion that Lomiko’s CEO, Paul Gill, described as "very encouraging".

The companies now intends to proceed with a drilling programme at the site, where they have already mobilised a drill rig for up to 10,000 metres of drilling.

Great Lakes Graphite Inc. has terminated an option agreement with Eloro Resources for the Summit-Gaber precious metals property in Quebec.

The company said that the decision was part of its strategy to focus on graphite and its Matheson micronisation facility in Ontario, which Great Lakes is preparing to commission in late 2015.

Great Lakes said it will settle a debt of $28,912 related to the Summit-Gaber project by issuing 270,000 common shares at a price of $0.107/share to Eloro.

ASX-listed IMX Resources Ltd has identified two strongly conductive drill targets close to previously identified high grade Shimba resource at its Chilalo graphite project in southeast Tanzania, following a fixed loop magnetic survey of the property.

The company said that although it does not have any immediate plans to drill out the potential resource extensions at Shimba but noted that the new discoveries meant that any future mining operation at Chilalo could be extended.

Also in Tanzania, fellow ASX-listed Black Rock Mining Ltd has been progressing its development of the Mahenge graphite project, with grades of between 6.51% C and 20.4% C reported from a number of prospects across the property in recent weeks.

The Manhenge project is contiguous to fellow ASX-listed Kibaran Resources Ltd’s Epanko project and has an initial exploration target of between 30m and 60m tonnes at 8-12% C. The company is working towards a maiden resource for the Epanko North part of the project as part of the present exploration activity.

In financial news, TSX-V-listed Zenyatta Ventures Ltd intends to complete a non-brokered private placement for gross proceeds of up to $2m, via the sale of units priced at $1.25/unit.

Each unit will consist of one common share and one half of one common share purchase warrant, entitling the holder to purchase one common share for $1.65 for a period of 12 months from the date of issuance.

In graphene news, ASX-listed Metals of Africa Ltd has said that graphene oxide and graphene have both been successfully produced from graphite taken from its Montepuez Central project in Mozambique.

Three exfoliation processes were tested, including a thermal method and a chemical reduction process, with the thermal process yielding the best results – a technique which the company noted is both simple and scalable.

Separately, Metals of Africa released a quarterly activities report for the three months ending 30 June 2015, where it revealed that it had just over Australian dollar (A$) 1m ($723,000*) in the bank. The company added that drilling has commenced at Montepuez to define a maiden JORC resource for the project.

UK-based Graphene Lighting Plc is to list in Canada through a reverse takeover by TSX-V-listed Canadian capital pool company, Oriana Resources Corp.

The two companies have signed a letter of intent outlining the terms of the reverse takeover, which involves a share exchange arrangement that will make Graphene Lighting a wholly-owned subsidiary of Oriana.

Graphene Lighting is also required to close a $5m brokered private placement of subscription receipts, with the proceeds to be used to execute the company’s product development, sales and marketing strategy.

IM’s 5th Graphite & Graphene Conference will be held on 8-9 December at the Waldorf Hilton in London. For more information, contact Peter Gilfillan

*Conversion made July 2015