Top Canadian Graphite Stocks

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As the electric vehicle (EV) revolution moves forward, many expect increasing EV sales to drive demand for graphite, a key metal in lithium-ion batteries.

Even though pricing for the metal has been disappointing for some investors in the past few years, 2021 kicked off with what seems to be a slight turn for flake graphite prices.

Despite the continued uncertainty brought by the coronavirus pandemic, several Canadian graphite stocks have seen impressive year-to-date gains.

Below we run through 2021’s top graphite stocks year-to-date on the TSX and TSXV. All year-to-date and share price information was obtained on July 6, 2021, from TradingView’s stock screener. All companies listed had market caps above C$10 million at that time.

1. Gratomic (TSXV:GRAT)

Year-to-date growth: 370.59 percent; current share price: C$1.60

Exploration and advanced materials company Gratomic has two graphite projects: Aukam in Namibia and Buckingham in Quebec. The company has two offtake deals for Aukam, which covers a historical vein graphite mine, and is solidifying plans to micronize and spheronize graphite from the asset.

During Q1, Gratomic provided updates on the commissioning of its flagship Aukam project, which has been underway since March 29. On April 8, Gratomic said it is in the research and planning phase of its goal to take Aukam solar, which will enable the company’s Aukam processing plant to transition from traditional fuel generators to clean, renewable and sustainable solar power.

The second quarter of the year saw Gratomic appoint new staff members to its team, as well as announce it will soon start trading on the metals exchange platform Technology Metals Market. Major news for the company came at the end of June, when it finalized an agreement to acquire the remaining 37 percent interest in Aukam.

2. South Star Battery Metals (TSXV:STS)

Year-to-date growth: 240 percent; current share price: C$0.17

South Star Battery Metals is focused on the acquisition and development of near-term production graphite projects in Brazil. South Star’s Santa Cruz graphite project, located in Southern Bahia, has at-surface mineralization in friable materials, and successful large-scale pilot plant testing has been completed. The results of the testing show that approximately 65 percent of graphitic carbon (Cg) concentrate is +80 mesh with good recoveries and 95 to 99 percent Cg. The company is carrying its development plan towards Phase 1 production, which is projected in Q4 2022, pending financing.

During the first half of 2021, South Star Battery Metals announced its partnership with a US laboratory that specializes in industrial graphite and technology to complete an advanced graphite metals and value-add testing program for battery and non-battery applications. In May, it provided positive purification results using a thermal process — a technology used for improving the quality of concentrate graphite for a broad range of value-add applications, including lithium-ion batteries.

Also in Q2, the company signed its first memorandum of understanding for 4,000 tonnes of natural flake graphite for a period of four years for Santa Cruz. Later that month, it signed an additional offtake deal for 20,000 tonnes of natural flake graphite concentrate over a period of five years. In June, South Star announced it had produced uncoated and coated spherical purified graphite suitable for use as anode active material for lithium-ion batteries.

3. NextSource Materials (TSXV:NEXT)

Year-to-date growth: 193.33 percent; current share price: C$2.64

Toronto-based NextSource Materials is a mine development company in the final development stage for its 100 percent owned Molo graphite project in Southern Madagascar. The Molo project is a fully permitted, feasibility-stage project and is the only project with SuperFlake graphite.

On February 6, the company secured a strategic investment led by former Xstrata CEO Mick Davis to fully fund the construction of its Molo graphite project. Late in March, the company kicked off the construction process by awarding the engineering, procurement and construction management contract to Erudite Strategies of South Africa. At the start of Q2, NextSource finalized a binding agreement to construct and operate a value-added battery anode facility to produce spheronized and purified graphite required in lithium-ion batteries for EVs and hybrid vehicle applications.

NextSource said the exclusive partnership pairs the company with two well-established and leading companies that process and supply spherical graphite to leading Japanese anode and battery makers, which in turn supply the Tesla (NASDAQ:TSLA) supply chain and other major automotive companies.

In May, NextSource started procurement for Molo ahead of expected mine construction in August 2021 and mine commissioning in April 2022. Later that month, it executed an offtake agreement with thyssenkrupp Materials Trading.

Before the end of the second quarter, the company kicked off a technical study for Phase 2 production capacity of at least 150,000 tonnes per annum of SuperFlake for Molo — a significant increase from a 2019 feasibility study that considered a Phase 2 capacity of only 45,000 tonnes per annum.

4. Lomiko Metals (TSXV:LMR)

Year-to-date growth: 136.36 percent, current share price: C$0.13

Lomiko Metals is engaged in the acquisition, exploration and development of resource properties that contain minerals for the new green economy. It owns 100 percent of the La Loutre graphite property and 20 percent of Promethieus Technologies.

On February 1, the company completed its 100 percent acquisition of the La Loutre flake graphite project, with Lomiko now working on a preliminary economic assessment to advance the project. On April 7, the company published some initial testing results. Later that month, the company announced that Critical Elements Lithium (TSXV:CRE,OTCQX:CRECF) and Lomiko have entered into an option agreement that gives Lomiko the right to acquire up to a 70 percent interest in the Bourier project.

5. Graphite One (TSXV:GPH)

Year-to-date growth: 104.08 percent, current share price: C$1

Graphite One is focused on becoming an American producer of high-grade coated spherical graphite, primarily for the lithium-ion EV battery market. The company plans to develop its Graphite Creek deposit, located in Alaska, into a vertically integrated operation.

A 2017 preliminary economic assessment estimates the capital costs for the project at C$363 million, with a mine life of 40 years and 60,000 tonnes per year of graphite concentrate output at 95 percent Cg, once full production is reached in year six.

On January 17, the company announced its Graphite Creek project has been designated a high-priority infrastructure project by the US government’s Federal Permitting Improvement Steering Committee.

In June, Graphite One announced plans to execute a 2021 drilling program at Graphite Creek. The drill program came after the company’s funding of C$10 million to advance a preliminary feasibility study, scheduled for completion in Q4 2021.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Critical Elements Lithium, Gratomic, Lomiko Metals, NextSource Materials and South Star Battery Metals are clients of the Investing News Network. This article is not paid-for content.