Battery Metals

Graphite Investing

Initial lab tests have shown that spherical graphite can be produced from flake graphite concentrate from Triton Minerals’ Nicanda Hill project.

Australia’s Triton Minerals (ASX:TON) made headlines Thursday with the announcement that initial laboratory tests have confirmed that spherical graphite can be produced from flake graphite concentrate from its Mozambique-based Nicanda Hill project. 
The company states that the tests used jet milling (spheroidization) equipment, and were conducted at a “highly reputed” laboratory based in the US. The flake graphite concentrate tested had an average feed size of under 100 microns (-140 mesh) and produced spherical graphite particles ranging in size from 5 to 40 microns. More specifically, 90 percent of the spherical graphite produced fell into the <35-micron range, while 50 percent fell into the <13-micron range and 10 percent was in the <4.5-micron range.
According to Brad Boyle, managing director and CEO of Triton, the ability to produce spherical graphite is a boon for the company as the material “is the foundation of the energy storage and electric vehicles market.”
And indeed, spherical graphite’s importance to the battery space is no secret. As Simon Moores of Benchmark Mineral Intelligence has explained, it is used exclusively in batteries and is “the battery grade of graphite that the industry needs to make superior lithium-ion batteries.” He added that creating the material is “a true value-added process.”
Of course, lithium-ion batteries can’t just use any spherical graphite. Triton states that they require two main categories of the material: coarse size (ranging from 25 to 48 microns) and fine size (ranging from 3 to 25 microns). Given that its spherical graphite spans both of those categories, the company believes that prospects are good for its product.

Financing plans?

Triton’s spherical graphite news is certainly interesting — it sent the company’s share price up 9.26 percent on Thursday to close at AU$0.295 — but investors who’ve been watching the company may remember that it’s got other balls in the air as well.
The company made headlines back in April when it implemented a binding offtake agreement for Nicanda Hill with Yichang Xincheng Graphite, a Chinese graphite products specialist. Under the deal, Triton is to provide Yichang with 100,000 tonnes of graphite concentrate per year for a period of 20 years — at a minimum sale price of US$1,000 per tonne of graphite concentrate, Triton’s minimum concentrate revenues will come to an impressive $2 billion.
That sounds pretty promising, but as with most good deals, there’s a bit of a catch: in order for it to go through, Triton must meet a number of requirements within 36 months of signing the offtake agreement — including achieving commercial production at Nicanda Hill. As a result, the race is on for Triton to achieve that milestone; of course, what that really means is that the race is on for the company to find funding.
Triton is certainly working hard to reach that point. Soon after the Yichang offtake was announced, the company signed a letter of intent with Shenzhen Qianhai Zhongjin Group regarding not only another offtake agreement for Nicanda Hill, but also $200 million in project funding. However, to receive that money, Shenzhen must, among other things, complete its due diligence.
Originally that was set to be finished by the end of June, but at the beginning of that month, Shenzhen sought an extension for the due diligence of up to six months. The company wants to include a formal review of Triton’s Ancuabe graphite project in its work, and the extension is intended to allow Triton to “obtain initial drilling, additional assay and metallurgical results” from the project.
All in all, pre-production capex for Nicanda Hill sits at US$110 million. In its most recent quarterly cashflow report, the company said it had AU$8.6 million in cash. As Triton continues to complete work at both Nicanda Hill and Ancuabe, market watchers will no doubt also be watching to see how the company’s financing plans progress.

Company news

Triton isn’t the only graphite company that’s been in the news this week. Tuesday saw Flinders Resources (TSXV:FDR) sign a new contract with a strategic Chinese partner that specializes in high-purity graphite. A “high-purity flowsheet” was developed for Woxna graphite in 2001, and the plan now is for Flinders’ Chinese partner to “verify all technical aspects of the purification process and define economic parameters.” Ultimately, an enhanced version of the original flowsheet will be created.
Already, product from Flinders’ Sweden-based Woxna graphite plant has been shipped to China, and “detailed bench-scale test work is underway.” Explaining the significance of the contract, Blair Way, president and CEO of Flinders, commented, “[b]y partnering with experts in the high purity field, Flinders gains a competitive edge for the timely transition into the high-purity market.”
Investors are no doubt pleased to see some positive news from Flinders. Though the company is well known for being the only TSXV-listed graphite producer, it hit a snag earlier this summer when it announced that due to the poor graphite price environment it would “reduce production [from the mine] and only supply larger volumes when improved graphite prices return.” Woxna is being “maintained on a production-ready basis,” and this week’s news shows that the company is by no means remaining inactive.
Finally, Thursday saw Magnis Resources (ASX:MNS) announce further refinements to the metallurgical process for graphite from its Tanzania-based Nachu project. The company said that it was able to produce a -300 micron graphite concentrate at greater than 99 percent TGC “whilst maintaining the recovery and grade of the Super Jumbo (+500 microns) and Jumbo (+300 microns) product streams.”
According to CEO Frank Houllis, the achievement “means that Magnis has the ability to supply a premium product at a substantially lower cost than other producers.” He added that the large graphite flake size at Nachu “is a key ingredient” in the success of the process.
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
Editorial Disclosure: Flinders Resources and Magnis Resources are clients of the Investing News Network. This article is not paid-for content. 
Related reading: 
Simon Moores on Spherical Graphite and the Benefits of Exploration

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