Marches Towards Inaugural PEA for Q2 2015
VANCOUVER, BC / ACCESSWIRE / March 19, 2015 / Graphite One today took a leap towards their PEA, announcing an update of their resource estimate at its wholly owned Graphite Creek property.
Using a 3% cut off grade, the company reported 17.95 million tonnes ("Mt") of graphite at 6.3% graphitic carbon (Cg) grade and 154.36 Mt inferred at 5.7% hosting over 8.7 Mt of in situ graphite.
This reigns as the largest known, highest-grade, large-flake deposit in the United States at a time when the U.S. is importing 100% of its graphite requirements. In addition, both Tesla and Alevo have committed billions to battery manufacturing plants for electric cars and grid level battery storage containers. These manufacturing plants will need critical long life supply of high quality graphite, most likely from U.S. soil.
Crucially, the updated resource estimate moves the status of the deposit of their January 2014 resource estimate from "Inferred" to "Indicated," now providing the basis for a Preliminary Economic Assessment (PEA) while bringing the project into full motion for full feasibility study, project financing and construction.
Graphite Supply Potentially on Home Soil
Graphite One's (GPH.V), (GPHOF) previous estimate from January 2014 suggested 186.90 Mt of graphite (Cg in geological terms) at 5.5% grade with a cut-off of 3%. The updated figures provide a more rigorous overview of the deposit ahead of likely production.
The area drilled was a 730m strike along the northeast area of the deposit using 48 drill holes since 2012. The company stated it remains open in all directions.
The Graphite Creek deposit is the largest known large-flake graphite deposit in the U.S. with a potential mine life of 100 years, while not far from a production scenario. The delivery of the PEA, due in Q2 2015, will be the defining point bridging the company from exploration to development should they proceed to production at that point.
Other Potential U.S. Graphite Suppliers
Alabama Graphite (ALP:TSX-VENTURE), (ALP.V) is currently focusing on developing the Coosa Graphite project in Coosa, Alabama, in the U.S.. The company says it's aiming to be the first and only just-in-time graphite supplier in the U.S. Its resource estimate based on a 2% cut off grade currently has an indicated resource of 38.15 Mt at 2.6% grade graphite and inferred resources of 26.99 Mt at 2.87% grade.
Graphite Supply is Beginning to Roar
Graphite is in hot demand. It's used in the production of lithium cells which power smartphones, notebooks and tablets - consumer devices that have enjoyed break-neck growth in developed markets with further explosive growth expected in developing markets, least of all India and China. More recently, Tesla's decision to set up its US$5 billion so-called "gigafactory" in Nevada, U.S. is expected to amplify demand for graphite with estimates of Tesla demanding 28,000 tonnes of spherical graphite per year, meaning a doubling of current demand. But the industry suffers from sudden interruptions in production due to overdependence on Chinese supply, which is diminishing. North America is in need of reliable supply closer to home.
Graphite explorers have plenty to be excited about. The U.S. is currently importing 100% of its graphite needs; there is sore need for home supply. The value of viable graphite explorers just jumped. In February, a Chinese state-owned company, Chinalco (3668.HK) announced an agreement with Australia's Syrah Resources (SYR:AX) for a 3-year contract to supply graphite. Syrah's Balama deposit in Mozambique has yet to go into production, due in 2016 - yet 35% of its supply for the first three years in business is already sold.
It's a good time to be a graphite explorer, especially in the United States.
Graphite One has a market cap of USD $10.4 million.
Alabama Graphite has a market cap of USD $19 million.
Syrah Resources has a market cap of USD $540 million.
SOURCE: Resource Reports