Northern Graphite secures price increase, shares up 14%
Northern Graphite Corp. [NGC-TSXV; NGPHF-OTCQB] said it has negotiated a significant price increase with customers for its graphite for 2025 to reflect rising costs of production and inflation. The company also said its Lac des Iles (LDI) processing facility, which was halted for maintenance on November 2, 2024, will resume operations next week.
“In order to ensure increased, stable production for 2025 and keep up with rising market demand, we have successfully completed a maintenance shutdown at the Lac des Iles mill, which will resume normal operation on January 13,” said Northern Graphite CEO Hugues Jacquemin.
“We have also negotiated new pricing with our customers to accommodate inflation and the rising costs of production. We are starting the year with a strong order book, reflecting continued robust demand as well as recent geopolitical events and supply chain concerns.”
Northern Graphite shares advanced on the news, rising 14.3% or $0.02 to 16 cents. The shares trade in a 52-week range of 22.5 cents and $0.045.
The company recently paused operations at its Lac des Iles (LDI) processing facility in order to complete repairs and maintenance and enable the mill to increase throughput to meet growing demand for natural graphite sourced outside China. The company said it would seek to mitigate any disruptions by supplying customers from existing inventories and from third parties.
“Lac des Iles has the potential to produce more and for longer than anticipated when we acquired the mine in 2022, and we need to prepare as we look to open a new pit and increase throughput at the mill,” the company siad.
The company said growing output from the cornerstone LDI mine is critical to its strategy as it works toward becoming a vertically integrated, mine to market supplier to traditional downstream customers and to the emerging market for battery anode material (BAM) as well as the next generation of solid-state battery chemistries. The company moved the LDI plant to a seven-day-a-week schedule in April of last year, boosting output by 59% over subsequent months, and plans to increase output further after the plant reopens.
Northern Graphite reported second quarter revenue of $5.5 million based on 2,772 tonnes of graphite concentrate sold at an average realized sales price of $1,972 per tonne (US$1,441 per tonne), 6.0% above the first quarter, due to a favourable product mix.
Aside from LDI, the company also owns the large-scale Bissett Creek project in Ontario and the fully-permitted Okanjande graphite mine in Namibia, which is currently on care and maintenance and represents an opportunity to substantially increase graphite production at a lower cost and with a shorter time to market than most competing projects.