Advancing the Graphite Creek Deposit in Alaska, USA
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Graphite One Inc. (TSXV:GPH, OTCQX:GPHOF) is a Vancouver, British Columbia-based mineral exploration company focused on identifying, acquiring and exploring high-potential projects ready for rapid advancement in the graphite market. Graphite One has defined America’s largest high-quality graphite deposit, the Graphite Creek Deposit strategically located in Alaska with direct ocean access to the high-tech American hub and Asian markets. The company plans to develop the project into a vertically-integrated operation producing high-grade coated spherical graphite (CSG) for the electric vehicle lithium-ion battery market.
Survey and drill results at Graphite Creek have shown large-flake, high-purity graphite exposed at surface. The company completed a preliminary economic assessment (PEA) on the property in 2017, with results including a pre-tax NPV (10 percent) of $1.037, a pre-tax IRR of 27 percent and a 40-year mine life. The PEA also outlined a plan for the Graphite Creek mine, mineral processing plant and product manufacturing plant. The 2018 field program is underway with the goal of working towards a pre-feasibility study.
The company’s naturally occurring STAX (Spheroidal, Thin, Aggregate and eXpanded) graphite offers an advantage when it comes to creating graphite for lithium-ion battery, energy storage and mobile technology manufacturers. The burgeoning technology-grade graphite market is only beginning to open up as green technology takes more precedence globally.
In April 2017, the Alaskan government recognized the Graphite One development project as part of a list of infrastructure projects introduced in testimony to the US Senate Energy and Natural Resources Committee entitled “the potential for infrastructure improvements to create jobs and reduce the cost of living through all-of-the-above energy and mineral production in Alaska.” Testimony provided by Alaska’s State Geologist positioned the Graphite Creek project as part of the state’s “significant potential development and infrastructure projects.”
In May 2015, Graphite One entered into a definitive long-term lease agreement with Kougarok LLC for its 24 unpatented federal mining claims at Graphite Creek.
Graphite One recently raised $4.2 million in financing. This was supplemented by an Alaska Senate Bill that allowed the AIEDA (Alaska Industrial Development and Export Authority) to issue bonds to finance the infrastructure and construction costs for the Graphite Creek project. The raised funds will be used for further exploration and development work at the Graphite Creek project.
- Indicated Mineral Resource of 17.95 Mt at 6.3 percent Cg and an Inferred Resource of 154.36 Mt of 5.7 percent Cg, both at 3 percent COG, makes the Graphite Creek deposit the largest published graphite resource in the United States.
- PEA for Graphite Creek included pre-tax NPV (10 percent) of US$1.087 billion and pre-tax IRR of 27 percent for 40-year mine life.
- PEA plan for mine, processing plant and product manufacturing plant resulting in 41,850 tonnes of CSG per year.
- Recent completion of a $4.2 million round of financing.
- Excellent potential for low-cost mining, high-grade and near surface.
- Graphite One’s STAX graphite has potential for exceptional processing, higher yields and improved performance.
- Potential for a multi-million tonne target of 235 – 492 Mt with grade between 4.2 percent and 7.9 percent graphite.
- Large-flake, high-purity graphite exposed at surface.
- Optimal geological environment conducive to an open-pit mining configuration.
- Tidewater gives access to American and Asian high-tech markets.
- 2018 field program underway.
The Graphite Creek Project
The Graphite Creek Project is comprised of 176 160-acre State mining claims on the Seward Peninsula, 65 kilometres north of the City of Nome, Alaska. Mineralization at the property is characterized by coarse crystalline, or large-flake, graphite (greater than 80 mesh) within graphite-bearing schists. Graphite mineralization is exposed at surface. The large-flake graphite occurs as disseminations and high-grade segregations and lenses in distinctive garnet-bearing quartz biotite schists and biotite schists. The host schist is continuous over 18 kilometers of strike length, based on mapping and geophysics.
Results from a 2012 drill program, as well as mapping, prospecting and geophysical surveying, have further confirmed graphite mineralization at surface. Mineralization where drilling occurred covers an area of at least 5.5 square kilometers, representing about 12 percent of the total strike length. The width and depth of mineralization confirmed by drilling are in excess of 250 meters. There is a potential deposit size of 235 – 492 million tonnes at average grades between 4.2 percent and 7.9 percent graphite.
In early July 2012, Graphite One completed the airborne survey for the Graphite Creek Project. Based on the presence of a strong Electromagnetic conductor, the survey was extended to the northeast by 4.5 kilometers, which was an additional 309 line kilometers totaling 999 line kilometers. As the EM conductor that is coincident with graphite occurrences is now more than 18 kilometers in strike length, this increases the potential for the discovery of a large tonnage, high-grade graphite deposit.
In May 2015, Graphite One entered into a definitive long-term lease agreement with Kougarok LLC for its 24 unpatented federal mining claims at Graphite Creek. The agreement includes an advance royalty of US$30,000, and US$30,000 payable annually until 2019. The royalty is to increase US$10,000 annually after 2019 until production begins. In April 2018, Graphite One announced the conversion of its federal claims to state claims.
America’s Largest High-Quality Graphite Deposit
Graphite One released an updated Resource Estimate for its Graphite Creek Project in March 2015 of 17.95 million tonnes indicated, grading 6.3 percent graphitic carbon, and 154.36 Mt inferred with 5.7 percent graphite, using a three-percent cut-off grade. A drill program completed in October 2014 increased the vertical and lateral drill spacing along a 730-meter strike length of the 4.8-kilometer long deposit. Drilling results moved a portion of the previous January 2014 resource estimate from inferred to indicated resource status, providing the basis for the project’s initial PEA.
In January 2017, Graphite One announced its inaugural PEA for its graphite project. Highlights from the PEA include:
- Pre-tax NPV (10 percent) of US$1.037 billion
- Pre-tax IRR of 27 percent
- Payback period of four years
- Operating cost of US$1,774 per tonne
- 55,350 tonnes per year of finished product production
- Mine life of 40 years
The PEA also included plans for a mine, processing plant and product manufacturing plant.
The Graphite Creek mine will be a truck and shovel operation with four active mining areas that house company-owned equipment, managing 4 million tonnes of material each year. Key equipment for the mine includes four excavators, eight rear dump trucks, three generators, a tailings facility, water and sewage treatment facilities, and maintenance and storage areas.
The mineral processing plant would reduce 1.018 million tonnes of graphite mineralization to 60,000 tonnes of graphite concentrate at 95 percent Cg per year. The process would be conducted by equipment like crushers, flotation circuits, drying and packaging equipment. The resulting dried concentrate will be packaged into one-tonne super sacks and loaded in containers to be shipped by truck to the Port of Nome and shipped to a manufacturing plant in Washington State.
The PEA assumes that a manufacturing plant in Washington will receive the output from the processing plant, where it will be pelletized and thermally purified to at least 99.95 percent Cg. Once purified, the graphite would be turned into 41,850 tonnes of CSG per year. The process will also allow for the gathering of 13,500 tonnes per year of purified graphite powder.
The STAX Quality Advantage
The acronym STAX stands for Spheroidal, Thin, Aggregate and eXpanded naturally occurring morphologies in graphite sourced from Graphite Creek. Spheroidal shapes are for lithium-ion batteries, thin flakes for premium alkaline batteries, aggregate flakes for lithium-ion batteries and expanded flakes are for flame-retardant materials. Coin cell tests showed little change in reversible discharge capacity and performance between coated and uncoated spherical graphite (SPG), while results confirmed high performance, repeatability and stability, making STAX a potential answer for high-powered electric vehicle batteries.
“These first coated coin cell results indicate that our C-SPG maintained high reversible capacity, while improving efficiency as measured by ICL”, said Anthony Huston, CEO of Graphite One. “The results were impressive when compared to those for typical coated natural graphite and a top synthetic graphite.”
2018 Field Program
In August 2018, Graphite One announced the launch of its 2018 field work program, which will help the company work towards a pre-feasibility study.
The program will include further discussions with the nearby communities, 2,000 meters of diamond core drilling within the identified resource, additional metallurgical test work, assessments of access routes and reconnaissance-level fish and wildlife surveys.
Doug Smith, B.Sc., P.Eng. – Executive Chairman and Director
Doug Smith has more than 35 years of experience in the international coal industry as a senior executive and corporate director. He was General Manager of Xstrata Coal Canada from mid-2011 to mid-2013, a role assumed following Xstrata Coal’s purchase of First Coal Corporation in August 2011. Smith had been President, CEO and Director of First Coal since May 2007 where he raised over $50 million in equity and directed its sale to Xstrata. For the previous 12 years, he was President and Director of Andalex Resources Inc., a private U.S. coal company, until he successfully directed its sale in 2006.
Smith holds B.Sc. degrees in Electrical Engineering and Biology, both from the University of Alberta. He has completed the Program for Management Development at the Harvard Graduate School of Business Administration and has earned the ICD.D certification from the Institute of Corporate Directors. He is a member of the Association of Professional Engineers and Geoscientists of Alberta and numerous professional organizations.
Anthony Huston, B.Comm. – President, CEO and Director
Anthony Huston holds a Bachelor of Commerce degree from the University of British Columbia. He is a successful entrepreneur with a background in business development and finance. Having served as Managing Partner in both public and private companies, Huston played an integral role in raising in excess of $100 million during his career. He has acted in roles to advise upon financial and acquisition transactions in many industry sectors, including real estate development, technology, bio-tech, and most recently the resource sector.
Alan Ahlgren, B.Comm. (Honours), CPA, CA – CFO and Corporate Secretary
Alan Ahlgren is a Chartered Professional Accountant, Chartered Accountant and has extensive experience having served as CFO and Corporate Secretary with AQM Copper Inc. and previously with First Coal Corporation, until its purchase by Xstrata Coal Canada. Recently, Ahlgren has been assisting in the restructuring of a company with operations in Argentina and with a mining company in transition following a purchase of a mine in the United States. Prior to First Coal, he served as Vice-President Finance with Kinross Gold Corporation. Ahlgren is a graduate of the University of Manitoba with a Bachelor of Commerce (Honours) in Accounting and Finance.
David Hembree, B.Sc., P.Geo. – General Manager Operations
David Hembree has over 35 years of experience in the mineral resource industry including in exploration, development and production of both open pit and underground operations. Prior to joining Graphite One, Hembree held the position of Vice-President of Exploration and Qualified Person (QP) with Kimber Resources Inc., where he was instrumental in the sale of their Monterde gold-silver deposit in Mexico. Previously, he was US Exploration Manager and QP for Golden Predator Mines US. Hembree has also worked as Chief Geologist at the open pit operations of Mineral Ridge Resources and Mt. Hamilton Mining Co., as well as US Exploration manager for Queenstake Resources USA. He holds a B.Sc. degree in Geology from Fort Lewis College in Durango, Colorado, is a Certified Professional Geologist with the A.I.P.G. and is a Registered Geologist in the State of Oregon. Hembree is the QP for Graphite One under NI 43-101.
Brian Budd – Director
Brian Budd was appointed President of North Country Gold Corp. in February 2014. He has been with North Country Gold since 2009, where he began as a Director and Vice-President of Corporate Development. Budd has played an integral role in North Country Gold’s financing, public relations and corporate development activities. He has an extensive management and corporate development background with over 25 years of entrepreneurial and sales leadership experience in the resource and high-tech industries. His business acumen includes the development and execution of comprehensive business and financing plans, corporate communication programs, as well as strategic planning for both the domestic and international markets.
Patrick Smith, P.Geo. – Director
Patrick Smith is a senior mining executive with over 35 years of executive management experience in the international mineral exploration and mining industry. Smith is currently President and CEO of Heatherdale Resources Ltd. Heatherdale is focused on the exploration and development of the advanced stage Niblack polymetallic deposit in Alaska. Prior to his current role with Heatherdale, Smith spent 32 years with Rio Tinto, during which time he held numerous senior management positions culminating as Managing Director of Exploration, Australasia Region based in Perth, Australia. Prior to that, he held the role of Exploration Executive reporting to the Head of Exploration for Rio Tinto based in London. His international experience included the role of Country Exploration Manager, Chile for Riominex, a subsidiary of Rio Tinto, based in Santiago from 1994 to 1997. Smith is the founding member of Rockford Resources LLC, a private minerals consulting company, and has successfully managed exploration programs in Alaska for over 17 years.
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