Top 3 Canadian Graphite Stocks of 2023
Which graphite stocks have gained the most so far this year? These three companies on the TSX and TSXV are up the most year-to-date.
Although graphite demand from other sectors fell in 2022, the electric vehicle and energy storage revolution continues to pick up speed. This means market watchers are keeping an eye on graphite, a key metal used in lithium-ion batteries.
Prices for natural and synthetic graphite have declined in 2023, which Wood Mackenzie senior analyst James WIlloughby told the Investing News Network was due to weakened demand from poor economic conditions globally, as well as stockpiled material in the electric vehicle supply chain. These factors have hit other battery metals in 2023 as well.
“Once these have cleared, we expect prices to improve,” he said during an interview. “However, the upside will be limited by the fact that some of the major graphite miners have slowed production in recent months (due to weaker demand); prices will face some headwinds as these mines ramp back up.”
Even with the sector facing some difficulties, a number of Canadian graphite stocks have seen impressive year-to-date gains so far in 2023. Below is a look at the year’s top graphite stocks on the TSX and TSXV. Data was obtained on July 25, 2023, using TradingView’s stock screener, and all companies listed had market caps above C$10 million at that time.
Year-to-date gain: 50 percent; market cap: C$34.62 million; current share price: C$0.225
Mason Graphite is working to “develop vertical and horizontal integration in the mining industry," and its main focus is battery materials and their by-products. Mason owns the Lac Guéret deposit, which it says is one of the world's richest graphite deposits.
Mason is developing the Uatnan project located in the Lac Guéret deposit in collaboration with Nouveau Monde Graphite (TSXV:NOU,NYSE:NMG). The latter company has the option to acquire a 51 percent co-ownership interest in Lac Guéret, which, if exercised, would form a joint venture between the two companies for exploration, development and mining at the property. Under the agreement, production from Uatnan would use Nouveau Monde’s Phase 1 natural graphite flake concentrator plant.
Mason Graphite’s share price shot up at the beginning of the year after the company released a preliminary economic assessment for the Uatnan project, rising from C$0.22 overnight to a year-to-date high of C$0.42 by January 19. The document, which the company filed in March, shows annual graphite concentrate production of 500,000 metric tons (MT) over a 24 year life of mine.
The company’s most recent release came on March 27, when Mason shared news from its 41 percent owned graphene company, Black Swan Graphene (TSXV:SWAN,OTCQB:BSWGF), which it spun out last year. While the company’s share price hasn’t reached its Q1 highs, it’s still up significantly year-to-date from its start of C$0.15.
Year-to-date gain: 47.52 percent; market cap: C$188.71 million; current share price: C$1.49
Graphite One aims to be a graphite anode producer at its Graphite One project, which would be fed using material from the company's Graphite Creek project in Alaska, US. In late April, Graphite One received sample graphite anodes created from its graphite, and said it has sent the resultant product for evaluation by a leading electric vehicle maker.
Earlier in the year, February drill results from 2022 exploration at Graphite Creek showed the expansion of mineralization with significant graphite grades. The company’s share price hit a year-to-date high of C$1.93 on March 7, days before it announced that the US Geological Survey’s report on the project reflects its own discoveries. According to the report, “(Graphite Creek) is the largest known flake graphite resource in the USA and is among the largest in the world.” Ultimately, the company announced, its 2022 exploration increased its resource by 15.5 percent in the measured and indicated categories to 37.6 million MT at 5.41 percent contained graphite.
While it is primarily targeting the battery and energy storage industries, in June, Graphite One announced a teaming agreement with Vorbeck Materials, which specializes in advanced graphite and graphene applications. Under the deal, Vorbeck will use Graphite One’s material in the commercial and defense sectors. That same month, Graphite One bought back a 1 percent net smelter production royalty for Graphite Creek, leaving two outstanding for the property.
While the company’s share price largely trended downward in Q2, it bounced back following a speech by US Senator Lisa Murkowski, who represents Alaska and is a member of the Senate Energy and National Resources Committee, to the US Senate on July 11. “... After my site visit there on Saturday, I’m convinced that this is a project that every one of us, those of us here in the Congress, the Biden Administration, all of us needs to support,” she said, and detailed the company’s plans to build a full domestic supply chain.
A week later, Graphite One was awarded a US$37.5 million Department of Defense Technology Investment Agreement grant as part of the Inflation Reduction Act. The news brought the company’s share price up to C$1.57.
Year-to-date gain: 14.93 percent; market cap: C$91.06 million; current share price: C$0.77
SRG Mining is developing its Lola graphite project in Guinea. The company’s goal is to support Europe’s lithium-ion battery and fuel cell markets by becoming a fully integrated battery anode material producer. In April, SRG filed an updated feasibility study for Lola, which includes annual production of 94,000 MT of flake graphite in concentrate and a 17 year mine life.
After being rangebound between C$0.54 and C$0.67 throughout the first five months of the year, the company’s share price shot upward at the beginning of June, although no news accompanied the movement. SRG’s first news since April came on June 16, when it shared director election results from its annual general meeting. The company's share price climbed to a year-to-date high of C$0.89 on June 26, and it again hit and then stayed at that level between June 30 and July 11.
July 10 brought news of a cooperation agreement between SRG and anode material producer Carbon ONE New Energy Group. Carbon ONE is acquiring a 19.4 percent stake in SRG at a price of C$0.60 per share for a total of C$16.9 million in proceeds. SRG will use the funds to advance Lola and accelerate development of an anode material plant that will have access to either the European Union or North American markets — potentially both.
“The investment allows SRG to benefit from C-ONE’s extensive technical experience and globally recognized brand to position SRG as a fully integrated producer of battery anode material,” SRG President and CEO Matthieu Bos said in a release.
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Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.