Graphite One releases PFS for Alaska project
Graphite One Resources Inc. (TSXV:GPH, GPHOF-OTCQX) said Monday it has increased the size of a previously announced non-brokered private placement to $21.3 million, up form the earlier target of $15.5 million.
Under the terms of the offering, the company plans to issue up to 18.5 million units priced at $1.15 per unit.
The announcement came as Graphite One tabled the results of a pre-feasibility study for its flagship Graphite Creek Property in Alaska.
Situated in western Alaska, about 50 kilometres north of Nome, Graphite Creek was recently designated a high-priority infrastructure project by the U.S. government, which is aiming to secure U.S. supply chains for critical minerals, including graphite.
Graphite One aims to become a vertically integrated American supplier, capable of mining graphite from its Graphite Creek Property. In keeping with that goal, the company has announced a parallel strategy to simultaneously develop a commercial scale battery anode materials manufacturing facility in Washington State and the Graphite Creek Mine.
The aim is to emerge as an integrated business operation producing lithium-ion battery grade materials and other graphite products for the U.S. domestic market on a commercial scale using primarily natural graphite from Alaska.
On average over its life, the manufacturing facility would produce 75,00 tonnes per year of products, including 49,000 tonnes annually of anode materials, 7,400 tonnes of purified graphite products and 18,000 tonnes of unpurified graphite products.
“Manufacturing would begin with purchased materials until Alaska production is available,’’ the company said in a press release.
Graphite One shares fell slightly on the news, dropping 2.3% or $0.03 to $1.26. The shares are currently trading in a 52-week range of $2.54 and 89 cents.
The company said the pre-feasibility study envisages an operational life of 26 years, (a mine life of 23 years) producing 51,813 tonnes of graphite concentrate annually.
The initial capital cost, including a US$170 million contingency is pegged at $1.24 billion. The study forsees an average production price of US$7,301 per tonnes.
Graphite One also released an updated resource estimate for the project, which is now estimated to host a measured and indicated resource of 32.5 million tonnes of 5.25% Cg (graphitic carbon).
The mine is planned as a conventional open pit operation, using drilling, blasting, loading and hauling. Over its 23-year life, the mine is expected to produce 22.4 million tonnes of ore with an average grade of 5.6% Cg, at a 2.2:1 strip ratio.
Peak production is expected to be approximately 11,000 tonnes per day.
Graphite is the anode material in a lithium-ion battery and is the single largest component by weight. There are no substitutes, and almost all of it comes from China So, if electric vehicle manufacturers like Tesla Motors Ltd. [TSLA-NASDAQ] and Volkswagon succeed in meeting just a fraction of their widely publicized sales targets, more graphite mines will be needed to support the required lithium-ion battery production.