IM Graphite News in Brief 30 October – 5 November

By Laura Syrett
Published: Thursday, 05 November 2015

GrafTech and SGL offer bleak outlooks for carbon materials; Triton ups resource at Nicanda Hill; Angstron Materials pledges to boost graphene production to 1,000 tpa.

US carbon materials firm GrafTech International Ltd reported a net loss of $50m for the third quarter of 2015 compared to a loss of $35m for the same period last year. The figures included $23m-worth of special charges, net of tax and reflected a 38% decline in sales to $160m, down from $260m in Q3 2014.

On an adjusted basis, the company’s net loss for the quarter stood at $27m, more than double the $13m figure recorded a year earlier.

GrafTech’s industrial minerals segment saw its Q3 sales decline year-on-year to $126m from $209m, while operating income fell to $3m from $12m. Its engineered solutions arm, meanwhile, posted net sales of $34m, down from $52m for the third quarter of 2014 and an operating loss of $4m, compared to income of $1m the year before.

"We continue to manage through a very challenging operating environment in our end markets and will continue to aggressively reduce costs to improve our competitive position," said Joel Hawthorne, GrafTech’s CEO. "With the benefits of the investment made by Brookfield Asset Management (…) we will continue executing our strategy and positioning the company for success as the cycle improves," he added.

The company became a wholly-owned subsidiary of Canadian asset management business, Brookfield Asset Management Inc., in December this year.

Rival carbon materials company, Germany’s SGL Carbon SE, has said meanwhile that it expects the renewed deterioration in the overall steel markets to have a negative impact on graphite electrode profitability this year and into 2016, despite past and ongoing cost cutting measures.

The company said it anticipates its graphite electrode business to be EBIT* negative in 2016, resulting in a significant deterioration of the EBIT of its performance products division. Simultaneously, SGL Group said it is reviewing further site optimisation and capacity reduction measures including potential site closures as well as further reductions in personnel from adapting its business model.

Elsewhere, ASX-listed Triton Minerals Ltd has updated the October 2014 maiden mineral resource estimate for the Nicanda Hill deposit at its Balama North graphite project in Mozambique.

The total mineral resource estimate for the site now comprises 1.44bn tonnes at an average grade of 11.1% C and 0.29% vanadium pentoxide (V2O5). The original measured resource stood at 33m tonnes grading at 12.3% C.

According to Triton, the upgrade ranks Nicanda Hill as the largest graphite and vanadium resource in the world. The company now plans to rapidly advance the project and commence production as soon as possible.

In Canada, Mason Graphite Inc. has completed and filed an environmental impact study for its Lac Gueret project in northeast Quebec with the state’s Ministere du Developpement durable, de l'Environnement et de la Lutte contre les changements climatiques (MDDELCC).

The study was jointly prepared by Mason and the environmental services of the engineering firm, Hatch, and consists of numerous technical analysis of the predicted project effects on biophysical and human environments. The local First Nation of Pessamit also participated in the assessment.

Filing of the study is an important step forward in the permitting in Lac Gueret, Mason said.

Fellow TSX-V-listed Caribou King Resources Ltd has completed its latest exploration and assay programme at its Buckingham project in southern Quebec.

A total of 18 holes were drilled on the property as part of the programme, 16 of which returned grades higher than 11.9% C, Caribou King said. Most of the samples were taken over approximately 900 metres from outcrops and succeeded in delineating a mineralised sequence extending over this length, with a thickness of at least 250 metres.

Subsequent ground-based electromagnetic surveying, mapping and sampling have provided the company with sufficient data to come up with a drilling plan for Buckingham.

Canada Strategic Metals Inc. and Lomiko Metals Inc. are to proceed with a resource estimate to define a flake graphite resource at the La Loutre property in Quebec. The estimate will be based on 25 drill holes of 2014 and the first 26 holes drilled this year, the results for 22 of which are still pending.

La Loutre is located approximately 53km from Imerys Graphite and Carbon’s Lac des Iles operating graphite mine, which is also in Quebec.

Saint Jean Carbon Inc. is in the process of filing a number of provisional patents to protect the company’s technology developments.

Phase one test results on superconducting graphene made from ore samples taken from the company’s graphite properties in Quebec will be issued upon completion of the patent filings.

OTC-traded Western Graphite Inc. has announced plans to purchase Atmosphere Global LLC, a producer of non-toxic, non-corrosive, pH neutral and biodegradable cleaning, sanitising and odour-eliminating products.

Western, which has also invested in exploration mining projects in Canada, said that Atmosphere’s products have applications in a range of industries, including agribusiness, waste water reclamation, industrial cleaning, marine and mining.

The company said that Atmosphere's ability to work in the mining space is expected to be profitable for Western.

ASX-listed Metallica Minerals Ltd has intersected 120 metres of graphite mineralisation from its maiden graphite core drill hole at the company’s Esmerelda graphite project in northern Queensland, Australia.

Metallica said that the findings was based on visual assessment of the drill core and that the graphite appeared between 68 metres and 189 metres in depth. Visual inspection further suggested that the majority of the core contained graphite with grades of over 10% C, with some portions in excess of 20% C.

A second drill hole at the site commenced earlier this week.

In financing news, Graphite One Resources Inc. has completed a non-brokered private placement which, together with a previously announced financing at the end of September, has raided gross proceeds of Canadian dollar (C$) 1.99m ($1.51m**).

The TSX-V-listed company issued 9.059m units at a price of C$0.07/unit. The net proceeds of the offering will be used for exploration and development work at Graphite One’s Graphite Creek property in Alaska, US.

ASX-listed Mozambi Resources Ltd has raised Australian dollar (A$) 1.75m ($1.25m) via a share placement priced at A$0.035/share.

The company plans to use the cash to define multiple JORC resources and expand discoveries previously announced at Mozambi’s Nachingwea graphite project in southeast Tanzania.

Finally, in graphene news, Angstron Materials Inc.’s CEO, Dr Bor Jang, said at last week’s Grapchina 2015 event in Qingdao, China that the company has come up with a two-pronged plan to eliminate bottlenecks in graphene production and kick-start market growth.

"We are ramping up production of graphene from 300 [tpa] to 1,000 [tpa] in 2016," Jang said.

"Inability to source commercial scale quantities of graphene has historically hampered the growth and implementation of graphene-enabled and graphene-enhanced applications such as next-generation energy technologies, composites, water treatment, and corrosion protection. Increased production means we can bring market costs down too, giving companies previously priced out of the graphene market access to the material’s unique performance advantages."

He also announced that Angstron will open up its extensive graphene production patent portfolio. "We’ll licence our graphene production processes to select partners worldwide," he said.

IM’s updated " Natural Graphite Re­port – Strategic Outlook to 2020" is now available to purchase. For more information or to request a sample of the report please email or call +44 (0) 20 7779 8141. The trends outlined in the report will also be discussed at IM’s  5th Graphite & Graphene Conference on 8-9 December at the Waldorf Hilton in London.

*Earnings before interest and taxes

**Conversions made November 2015