Graphite One selling Alaskan NSR for US$5.22 million

Graphite One Inc. [TSXV-GPH; OTCQX-GPHOF] reported that Taiga Mining Company Inc. has exercised its option to purchase a 1% net smelter production royalty (NSR) from Graphite One. The NSR is attached to 133 Alaska state claims owned or leased by Graphite One which the company purchased on June 21, 2023, for approximately US$450,000 by issuing to the vendor 456,500 common shares of the company at a price of $1.48 per share. The consideration paid for the sale of the NSR is approximately US$5.22-million which represents the outstanding Taiga loan balance and accrued interest.

“With the sale of the NSR to Taiga and their continued support, Graphite One is debt free heading into 2024,” said Anthony Huston, president and CEO of Graphite One.

The NSR commences on the first day of the month in which the first concentrate is produced from certain of the mineral claims for a period of 20 years.

Two other NSRs on the Graphite Creek property remain outstanding: a 5.0% and a 2.5% NSR applicable to certain Alaska state claims, of which 2% of each NSR can be purchased separately for US$2-million each, leaving a 3.0% and a 0.5% NSR on their respective claims.

Graphite One also announced the grant of 906,639 restricted share units (RSUs) and 768,880 performance share units (PSUs) to its officers pursuant to the terms of the company’s omnibus plan. As previously announced on the January 20, 2023, press release, these RSUs and PSUs were the balance of the 2023 awards reserved for issuance in the second half of 2023 under the new compensation program and a new grant to one officer who joined the company on April 1, 2023.

Each RSU and PSU will convert into one common share of the company on each vest date. The RSUs will vest in three tranches on the first, second and third anniversary date from the date of grant. The PSUs will vest on the third anniversary date from the date of grant subject to the achievement of certain corporate performance criteria.

The company also announced that the board of directors has approved a grant of 47,250 stock options to an officer who joined the company on April 1, 2023, under the terms of the company’s option plan. The options have an exercise price of 85 cents per share, being the closing price of the company’s shares on the TSXV on December 19, 2023. The options vest one-third on the first, second and third anniversary from the date of grant and expire on Dec. 19, 2028.

Following the grant of options, RSUs and PSUs, the company has 131,850,225 common shares issued and outstanding, 9,525,329 options, 7,395,006 RSUs, and 768,880 PSUs issued under the company’s stock option and omnibus plans.

With the United States currently 100%-import dependent for natural graphite, Graphite One is planning to develop a complete U.S.-based, advanced graphite supply chain solution anchored by the Graphite Creek resource. The Graphite One project plan includes an advanced graphite material and battery anode manufacturing plant to be sited in the contiguous United States. The plan includes a recycling facility to reclaim graphite and the other battery materials, to be co-located at the site, the third link in Graphite One’s circular economy strategy.

Graphite One continues to develop its Graphite One project to become an American producer of high-grade anode materials that is integrated with a domestic graphite resource. The project is proposed as a vertically integrated enterprise to mine, process and manufacture anode materials primarily for the lithium-ion electric vehicle battery market.

As set forth in the company’s 2022 prefeasibility study, graphite mineralization mined from the company’s Graphite Creek property, situated on the Seward Peninsula about 60 km north of Nome, Alaska, would be processed into concentrate at an adjacent processing plant. Natural and artificial graphite anode materials and other value-added graphite products would be manufactured from the concentrate and other materials at the company’s proposed advanced graphite materials manufacturing facility to be located in the contiguous United States. The company intends to make a production decision on the project upon the completion of a feasibility study.