Focusing on Bissett Creek Flake Graphite Deposit
Recently announced significant increase in estimated resources
- Demand growth driven by the ongoing industrialization of China, India and other emerging economies, and many new applications such as Li ion batteries, fuel cells, vanadium redox batteries and nuclear and solar energy
- Supply concerns as 70% of world production comes from China and itsproduction/exports are expected to decline, export tax and licensing system imposed
- Both EU and USA have named graphite a supply critical mineral
- Large flake, high purity deposit (40 year resource* with expansion potential)
- Close to infrastructure and markets, simple mining and metallurgy,
- Bankable Feasibility and full permitting expected by 2Q 2012
The Next Strategic Mineral
Graphite demand has increased 5% per year for the past decade due to strong demand from traditional steel automotive markets and the ongoing industrialization of India, China and other emerging economies. Substantial incremental demand will also be generated by emerging applications such as Li ion batteries which take 20 to 30 times more graphite than lithium to make. Annual flake graphite production will have to increase substantially to meet forecast battery demand with only moderate acceptance of EVs and HEVs. China, which produces of 70% of the world’s supply, is seeing costs increasing, production and export growth leveling off, and quality declining. As a result, export duties and licenses have been imposed. After 15 years of flat prices there are very few projects in the development pipeline and accordingly, graphite represents an undervalued commodity in the context of the current super cycle.
Bissett Creek Property
The Bissett Creek property is located between the cities of Ottawa and North Bay, Ontario Canada and isapproximately 15 km from the Trans Canada highway. The site can be accessed by a good quality all weather road and is close to infrastructure. A full feasibility study** completed on the property in 1989 by such prestigious engineering firms as Kilborn andCominco Engineering concluded that the project was economic but it was not developed due to a subsequentdecline in graphite prices. Over 8,000 meters of drilling had been completed in 242 holes and a large resource witha low strip ratio was identified, including a proven and probable reserve**. Extensive metallurgical testing
indicated that it could be processed with a standard flotation concentrator. A new NI 43-101 preliminaryassessment* modeled a 40 year mine life producing 20,000 tonnes of graphite per year with recoveries of 94%, a0.66/1 waste to ore ratio, and estimated a 24% IRR and a 6 year payback.
A 2,900m infill and expansion drilling program has since been completed and resources have significantlyincreased. Using a cut off of 0.986% graphitic carbon (“Cg”), they now total 25,983,000 tonnes grading 1.81% Cg in the indicated category (470,300 tonnes of contained graphite) while inferred resources total 55,038,000 tonnes grading 1.57% Cg (864,100 tonnes of contained graphite). As a result, the potential exists to substantially increase production in the future if warranted by graphite demand.
Metallurgical testing, including a pilot plant run, and a bankable final Feasibility Study (“FS”) are underway and areexpected to be completed in Q1 2012. The environmental and mine permitting process was initiated in 2010 and isexpected to be completed in the second quarter of2012 following which the Company will be in a position to beginconstruction, subject to a positive FS and financing. Construction will take approximately one year to complete.
Almost all production will be high carbon, +80 mesh large flake and approximately 50% will be +48 and +32 mesh jumbo sized flake, resulting in premium pricing. Bissett Creek is one of the leading undeveloped graphite deposits in the world and has significant potential to expand to meet the expected growth in Li ion battery demand. Northern Graphite is listed on the TSX Venture Exchange under the symbol “NGC”.