Berkwood Resources

Advancing Graphite and Cobalt Projects for the Battery Industry

This profile is part of a paid investor education campaign.*

Overview

Berkwood Resources Ltd. (TSXV:BKR) is a Vancouver-based junior resource exploration company. As their slogan “Plugged into high tech minerals” suggests, Berkwood focuses on finding resources for 21st-century technologies. The company has staked its future on four Quebec projects with graphite, cobalt, vanadium and lithium (all elements that go into electric car batteries.

“In 25 years of being involved in resource companies, I’ve developed a focused recipe for success. And that’s structure, structure, structure,” said Berkwood President and CEO Thomas Yingling. “You need geological structure, management structure and share structure—and Berkwood possesses all three.”

The company’s flagship property, the Lac Guerét project, shares a similar structure with one of the highest-grade graphite deposits in the world, located on Mason Graphite’s property in Cȏte Nord, Quebec. Both companies own large contiguous properties, with a major geological anomaly trending from Mason’s land onto Berkwood’s to the south suggesting the presence of a shared resource structure.

Mason Graphite’s high-grade graphite project possesses an NI 43-101 compliant proven and probable mineral resource, grading 17.2 percent carbon as graphite. Mason is in the midst of mine development. Next door, Berkwood has completed preliminary exploration and conducted three separate drill programs totaling 27 holes over the course of the summer and winter of 2017 , which led to results that were characterized as high grade (18% Cg) and large graphite flakes. The company completed its third phase of drilling at the end of March.

A three-hour drive from the city of Baie-Comeau, Berkwood’s Lac Guéret property boasts good infrastructure, with a highway slated for a major $400 million upgrade passing nearby and many access roads. It’s also situated in one of the most mining friendly jurisdictions in the world—Quebec, ranked 6 of 104 areas on the Fraser Institute’s 2016 global Mining Attractiveness Index. The index is calculated based on the absence of onerous regulations, and the presence of low taxes, high quality infrastructure and supportive government policies. The latter includes Quebec’s highly regarded sustainable development initiative.

Through aerial magnetic surveys at Lac Guéret, Berkwood discovered six zones with anomalies suggesting large graphite deposits. Follow-up ground crews with hand-held electromagnetic survey equipment tested these anomalies to confirm their existence and whether they could contain high grades. The number of candidates were reduced from six to two based on size and economic feasibility. One of the remaining two areas of high potential (Zone 2) contains the anomaly bisected by the shared Mason/Berkwood property boundary.

In February 2018, Berkwood announced the acquisition of a private company with land holdings in the region, extending its Lac Guéret projects to 25,180 hectares and making it the largest property in the area, subject to TSXV approval. The newly acquired claims cover an electromagnetic anomaly associated with Mason Graphite’s project.

Berkwood continues to deliver shareholder value by maintaining a tight share structure—with less than 34 million shares issued to date despite owning an already drilled  project, now fully funded; in November 2017 Berkwood completed a major private placement for $2.18 million.  In addition, Berkwood is led by an experienced management team with over 100 years combined experience in raising capital and developing successful producing mines.

Besides its Lac Guerét property, the company also holds three other properties in Quebec. These are the Cobalt Ford project, the Delbreuil lithium project and the Roscoe vanadium property, all of which were acquired between June and October 2017.

Investment Highlights

  • Berkwood has High Grade and Large Flake Graphite, which is what the EV Battery makers want for the Anode in their batteries
  • Berkwood’s management team is calling it Anode Grade Graphite.
  • 2017 drilling programs showed average grades of 13.64 percent to 21.86  percent Cgr (18 % average grade over all) and true thicknesses of 20.9 to 71.1 meters classifying the deposit as hosting large flake graphite
  • 2,525 meters drilled
  • Airborne and ground geophysics discovered a possible extension deposit next door to Mason Graphite’s soon to be in production mine.
  • Experienced management with over 100 years combined experience in raising capital for and being involved with numerous producing mines.
  • Tight share structure with less than 34 million shares released.
  • Completed financing for $2.7 million dollars, added to the existing $600,000.

Graphite Market: Boost from Battery Industry

Graphite is frequently ranked among high-tech resources—but its primary traditional use has been as a strengthener for steel production. Depressed steel markets have kept graphite prices low, leading investor news coverage focused on other more  lucrative hi-tech minerals, including lithium. However, graphite prices could rebound shortly as demand is driven up by developments in the automotive and battery industries.

This shift began in 2014 when the demand for graphite grew as a result of their role in lithium-ion battery anodes. “Our cells should be called nickel-graphite, because primarily the cathode is nickel and the anode is graphite with silicon oxide,” Elon Musk told reporters when discussing Tesla’s lithium-ion battery production. There’s “a little bit of lithium on there, but it’s like the salt on a salad.”

As of mid-2017, all of Tesla’s high-grade spherical graphite was sourced from China. But Berkwood hopes to change that —for Tesla, and for hundreds of smaller companies producing hi-tech products with graphite components. These range from the heat spreaders in small tablet computers to the linings in pebble bed nuclear reactors. Management hopes the potential high-quality of its graphite will also qualify it for use in graphene—a heavily refined graphitic product with huge upside. Graphene is stronger than steel and more conductive than gold, and used by many companies in development efforts towards disruptive solar panels, supercapacitors, and much more.

Graphite has multiple applications that range from the makeup of pencils to steel strengtheners or lubricant. Each of these applications, however, require different types of graphite. When it comes to lithium-ion batteries, the requirement is for large-flake, high-grade graphite. Following its recent drill program, Berkwood has been able to determine that its graphite deposit meets those conditions, making them a potential supplier to the lithium-ion battery industry.

berkwood-graphite-product

berkwood-metal-winners

Lac Guéret Properties

Berkwood’s Lac Guéret East and South properties, located in Cȏte Nord, Quebec, are part of the Plan Nord Region and are included in Quebec’s highly regarded sustainable development initiative. The 25,180-hectare exploration project includes what is being categorized as a large-flake, high grade graphite deposit, currently undergoing late-stage exploration.

berkwood-lac-gueret

berkwood-lac-gueret-properties

The Berkwood property possesses easy access via a major secondary road, and numerous tertiary and forestry roads traverse it. In 2017, the government of Quebec committed $400 million to improve nearby HWY 389 to the upcoming Fermont mine.

The property directly borders on Mason Graphite’s property to the north and west  Madon’s  flagship project is estimated to possess at least 75 million tonnes of high grade large flake graphite and possesses robust economics. Management anticipates a $90 million cost to build the mine, with a minimum 2.5-year payback and a 24-year-plus mine life.  Mason has a $300 mil cap value and was  where Berkwood  is now,  2 years ago.

Mason shares similar prospective geology to Berkwood’s project. The company’s focus to date has been on the southern property where the largest anomalies reside, including an anomaly shared with Mason and thought to represent a continuation of Mason’s graphite resource.

Exploration initiatives

A 2014 heli-born MAG-EM survey identified several large EM anomalous zones in Lac Guéret’s southern property. The zone 2 anomaly, shared with Mason, is bisected by the Berkwood/Mason property border. Ground geophysical crews confirmed the presence of the large zone 2 conductive anomaly. Follow-up outcrop samplings also found the presence of graphite at the surface, with concentrations as high as 36 percent graphite as carbon.

In the summer of 2017, Berkwood launched its first phase of drilling, which went on to cover 13 drill holes in the southern property, across both zone 1. Early results from the program consistently showed intersections of graphite, which led the company to acquire further claims on trend with the Mason Graphite property. All of the holes hosted graphite intersections, and results included average grades of 14.39 percent to 25.52 percent Cgr and true thicknesses ranging between 22.1 meters to 40.3 meters. These results led to a second drilling program in zone 1, which was conducted in late 2017.

During the second phase of drilling, the company intersected multiple instances of massive graphite, with one intercept of over 107 meters in width. All five holes of the program were successful in intersecting large intervals of graphite. Results from phase 2 included an average grade range of 13.64 percent to 21.86 percent Cgr and true thicknesses of 20.9 meters to 71.1 meters.

The third phase of drilling included 9 holes and was finalized in March 2018. During this program, the company was successful in intersecting graphite in all drill locations again.

Results from all three drilling programs have been characterized as large graphite flake, easily concentrated by simple inverse gravity processes. With the goal of maintaining its exploration success and expanding the resource in the South Lac Guéret, Berkwood’s third phase of drilling was completed in March 2018.

berkwood-lac-gueret-chart

Cobalt Ford Property

On June 5, 2017, Berkwood announced entering into an agreement to acquire a private BC company, whose sole asset is the Cobalt Ford property, located in the Côte Nord area of Quebec. The property is one block of 40 claims, totaling roughly 2,176 hectares. Situated near extensive infrastructure — including the Manic 5 hydroelectric dam, 15 kilometers to the south, and which provides lodging, food and other services, as well as an airport. Once the transaction is complete, Berwood will own 100 percent of the property.

Successive geological mapping of the property between 1977 and 2006 revealed the presence of multiple sulphide mineralizations. Rock sampling returned cobalt values of 904.3 ppm and 1480 ppm. While numerous drillings also returned base metal results, concentrated in three major showings: Lac Paradis (1480 ppm copper) Anomalie EM E2 (904 ppm copper) and Anomalie EM C2 (copper).  Berkwood plans to conduct a UAV drone survey of the property alongside additional exploration activities.

Delbreuil Lithium Property

In July 2017, Berkwood acquired a package of 53 claims in the lithium-rich region of the Abitibi area, east of Simon Lake, Quebec. Named the Delbreuil project, the property is easily accessible by roads and sits 78 kilometers away from the Val D’Or municipality.

berkwood-delbreuil

The project’s claims have similar geology to other occurrences in adjacent land, with lithium showings presenting as spodumene hosted in pegmatites. The claims were previously explored for base metals, and historic assays presented results of up to 3.4 percent zinc, 0.27 percent nickel, 0.38 percent copper, 4.1 g/t silver and 0.06 percent cobalt. These exploration activities also uncovered assay results for 1,290 ppm anomalous lithium and 126 ppm tantalum.

Management

Thomas Yingling—President, CEO and Director

Thomas Yingling benefits from over 25 years’ experience managing publicly traded companies. He has served as President and CEO and/or a director of other resource based public companies. During that time Yingling has specialized in Corporate finance, assisting in raising capital, corporate communications and strategic planning for the companies. Yingling has built and maintained strong business relationships in North America, Europe and Asia.

Binny Jassal, CPA, CGA FCCA—Chief Financial Officer

Binny Jassal brings over 20 years of accounting and management experience to the Company. Jassal is qualified as a Certified Public Accountants (CGA) in Canada, and fellow member of Association of Chartered Certified Accountants in London England and holds Certificate in Accounting and Finance from Ryerson University Toronto. Jassal is currently serving as a director and/or chief financial officer for a number of public companies in mining sector. Jassal will be an important member of the team working on the financial and corporate side of the operations.

Ian Graham—Director

Ian Graham is a mining professional with over 20 years of experience in the technical characterization and financing of mineral deposit exploration and development. Ian’s experience with the major mining companies Anglo American and Rio Tinto has been followed by experience in founding and financing public companies in the minerals sector. In his roles with both the major and junior companies, Graham has been involved with the modeling of project economics (DCF) and the structuring of project and company financing. His project roles have taken him to southern Africa, Canada, the US, India, and Russia; as Chief Geologist with the Project Generation Group at Rio Tinto his focus was of a global nature. Graham’s corporate roles have involved establishing Canadian companies with projects active in Canada, the US, Colombia and Peru: these companies have completed financing in the Americas, Europe and China. His mine projects include the Diavik Diamond Mine (Northwest Territories, Canada), Resolution Copper (Arizona, USA), Eagle Nickel (Michigan, USA), Lakeview Nickel (Minnesota, USA) and Bunder Diamonds (India). He graduated from the University of Natal (now Kwa-Zulu Natal) in Durban, South Africa with a B.Sc. in Geology and Applied Geology (1984) and B.Sc. (Hons) in Geology (1985).

Charn Deol—Director

Charn Deol has over 35 years of experience in the financial markets. Deol currently serves on both private and public company boards as a director or in a management capacity. His past and present experience includes providing management and consulting services to companies, project analysis, investor relations, technical market analysis and the financing of international projects. Deol has extensive experience in international business development, having previously been a senior partner in a futures trading firm (Evergreen Futures) with operations in Canada and Asia and negotiating mining projects internationally.


 

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