LONDON, October 25, 2017 /PRNewswire/ --
Spot prices for graphite electrodes have spiked over 300 percent since January, hitting up to a whopping $35,000 per tonne as graphite supplies dry up for a metal that is of crucial importance to the lithium batteries that form the backbone of the electric car boom. In focus today includes: Teck Resources Limited (NYSE: TECK), Endeavour Silver Corp. (NYSE: EXK), Magna International Inc. (NYSE: MGA), Hecla Mining Company (NYSE: HL)
Demand for tech-grade graphite is expected to increase 200 percent in less than three years, and 300 percent by 2025, and the United States, the largest consumer of graphite, doesn't even mine any.
But it might, soon.
A little-known company called Global Li-Ion Graphite Corporation (LION: GBBGF) now has an option to buy the only property with a good shot at containing a graphite deposit within 50 miles of Tesla's battery gigafactory in Nevada.
The only thing better than lightweight, quick-charging, longer lasting tech-grade graphite that doesn't overheat, is graphite made in America, right next to a game-changing gigafactory that needs this metal.
Our rapidly evolving energy future - packed with electric vehicles, massive energy storage solutions and nanotechnology - requires more tech-grade graphite than it does lithium and cobalt.
In the words of Tesla CEO Elon Musk himself: "Our cells should be called Nickel-Graphite, because primarily the cathode is nickel and the anode side is graphite with silicon oxide… [there's] a little bit of lithium in there, but it's like the salt on the salad."
If shortages for lithium and cobalt are looming large, shortages of graphite are even scarier. Most of the world's graphite was coming from China, but now even China is importing.
And while the next wave is all about graphite, driven by a major surge in EV production and new battery gigafactories, what follows could be even bigger.
What follows is the biggest potential opportunity named graphene-the superman of metals, better known as the strongest material in the world. Graphene-the individual layers of graphite-could make possible everything from artificial hearts and retinas to flexible phones and lightweight aircraft.
For early-in investors seeking to catch one of the biggest waves of the decade, graphene is it. For graphite, the supply shortage is already looming large. For graphene, this is the race to the commercial finish.
And center stage, we have the first company working to develop a graphite mine in the U.S.
Here are 5 reasons to keep a close eye on Global Li-Ion Graphite Corporation (LION: GBBGF) on the tip of this next wave …
#1 Graphite Is Everywhere, Graphene Will Be
Graphite is one of the two mineral forms of carbon-a status it shares with diamonds, and it's becoming just as precious-across industries.
Right now, it's the key to our EV future. Lithium-ion batteries have a lithium cathode and a graphite anode, and despite the name, these batteries require 10 to 20 times more graphite than lithium.
In short, it's a wonder metal that behaves like a metal and conducts electricity, but also acts as a nonmetal and resists high temperatures.
Graphite is present across the auto industry, not just EVs, and it's a huge factor in the production of steel and glass, and in the processing of iron. It's a lubricant. It's a super-strength material used in sports equipment. You can find it in power tools, vacuums, bikes, solar power-even the military uses it.
And when graphite is broken down into graphene, the potential is mind-blowing. Graphene, the strongest material in the world, is at the center of a major global race to commercialization because its uses could define our technological advancement for decades to come.
As LION president Jason Walsh notes, "Graphene is the biggest game-changer of our lifetime. Its applications are immense."
Graphene sheets, which comprise the layers of graphite, are 10 times lighter and 200 times stronger than steel. It's the strongest material in the world, and it's the backbone of nanotechnology. Isolated only in 2004, graphene is the world's first 2D material.
Graphene is being touted as a key material for the medical world, making new artificial hearts and retinas possible, as well as flexible electronic devices and even aircraft parts.
It can mean clean drinking water for millions of people as graphene membranes aid purification technology and desalination. For energy storage, it could mean yet another revolution, making electric sports cars possible…
Virgin Atlantic president and investor extraordinaire Richard Branson thinks that the entire airline industry will be flying lightweight planes made from graphene in 10 years because they are desperate for lighter fleets that can combat rising fuel prices.
LION is positioning itself in front of soaring demand with the intention to supply all of these markets, as the first on the U.S. scene.
#2 One Direction Demand
The drivers of demand are many and varied:
Tesla alone will suck up a ton of graphite, but there are over half a dozen other battery gigafactories being considered in the U.S., and just as many more in Europe.
- Tesla's planning to pump out some 500,000 EVs a year, and its 35 GwH capacity gigafactory plans to ramp up to 150 GwH
- Northvolt is planning a similar plant in Sweden
- Dyson is building a $1-billion gigafactory
- LG plans to open Europe's largest EV battery factory in Poland next year
- General Motors) recently released plans to launch 20 EV models by 2023
- Renault is planning to double its EV offerings in the next five years
- Panasonic just announced the start of automotive lithium-ion battery production at a plant in Himeji, Japan from 2019 (adding to its existing five plans in Japan, which supply Tesla).
- Demand for graphite for lithium-ion batteries is set to increase by over 200 percent in the next four years, driven by EV demand and energy story.
- Distributed energy storage revenue alone is forecast to exceed $16.5 billion by 2023 driven by rapid innovation and intense competition, says Navigant Research.
And that's only one aspect of the fantastically tight graphite supply equation that ignores all the metal's other uses. Consumer electronics are on the eternal upswing, and there's already a shortage of graphite electrodes that could last for five years and is acting as a reflationary driver of steel prices according to Platts.
Steel production alone is expected to drive the global graphite electrode market to reach $5.68 billion by 2024.
Demand is expected to be nothing short of exponential.
#3 America's First Tech-Grade Graphite?
Graphite is critical to the U.S.-both commercially and strategically.
For one of the first companies with plans to mine and develop tech-grade graphite made in America, Global Li-Ion couldn't be better positioned, right in Tesla's backyard.
LION's (LION: GBBGF) optioned Chedic Graphite Mine in Nevada is only 50 miles from Tesla's gigafactory, and it's got a producing history. Back in the 1920s, this 1,000-acre play was producing graphite for pencils. But it has the potential to contain a very large amount of graphite mineralization, according to past work done-and based on historical records, portions of it have reportedly tested a high carbon content.
Right now, LION is in the process of securing permits, and it's engaged GeoXplor, one of the most prominent operators in Nevada, to conduct confirmation and exploration drilling. Drill hole locations are in place and geophysical surveys are already completed.
The company is expecting to hear good news any time on the permitting process, and their optimism makes sense: Not only is this a past-producing mine, but Nevada is a mining-friendly state that's been key to harness the energy revolution.
But LION is targeting Asian demand, too…
#4 Madagascar License Taps into Chinese Demand
China is a massive consumer of graphite, but it's also the main producer. But a recent crackdown on polluting industrial plants has taken 30 percent of its graphite electrode production capacity offline, turning it into an importer instead. That's 300,000 tonnes of graphite capacity shuttered, leading to soaring prices for the metal.
LION (LION: GBBGF) plans to tap into this Chinese market, as well as Asian neighbors in India-from Madagascar.
Again, we're looking at past-producing mines that were once permitted, with infrastructure in place, and, if all goes according to plan, production ready to go online in the near term.
The company recently signed a MOU to buy the Ambato-Arana Mines permits which total 4,375 hectares, and they are right next to a main highway, and only 200 kilometers from Madagascar's main seaport of Toamasina. They're also only 20 kilometers southwest of Sheritt's Ambatovy nickel and cobalt mine.
LION's Malin, who has extensive mining experience in Madagascar, says that finding graphite with the right kind of quality specifications is challenging-but that's what they've found in Madagascar.
"One of the things that we liked about this graphite is that it is a high-carbon content, high-quality flake graphite, and the flakes are large flakes. This has the advantage of lending itself to favorable processing into forms that can be used for batteries, fuel cells, and even nanotechnology," Malin said.
The company is also considering other acquisitions, and is in the process right now of discussing additional Graphite holdings in Madagascar.
Considering this fantastically tight supply equation and demand that is forecast to go in one direction, a small-cap company like Global Li-Ion, targeting both Nevada and an outlet to Asia, appears to have a winning business model.
#5 An Untold Story for an Increasingly Needed Commodity
Graphite prices are soaring.
This year alone, shortages in China have driven prices to $16,330 per tonne. That's a ninefold increase. On a global level, spot prices for graphite electrodes have jumped even more-hitting up to $35,000 per tonne as Chinese exports dried up.
And we're already late to the lithium party.
Now it's about graphite, and the superman of metals, graphene.
Graphite is already the tightest supply story in the massive EV chain. Its derivative, Graphene, could be the game-changer. It's projected to be the metal of our future, just waiting to be scaled up economically.
A past-producing mine that could be one of the first to provide tech-grade graphite made in America could be momentous, and the first catalysts in the form of permits in Nevada could start coming in soon.
You can find out more about Global Li-Ion Graphite Corporation at the following links ( LION: GBBGF)
Other players in the tech and metals race:
Teck Resources (NYSE: TECK): Zinc hasn't been Teck's best friend of late, but that looks set to change in the medium term, as supply continue to dwindle and as we hear news that the world's top producer of the metal-Glencore-isn't planning to bring shuttered mines back online. Supply will remain tight.
Keep in mind this, though: Teck's Q1 earnings and revenue fell short of expectations because of weaknesses at its zinc unit, sending it shares down about 6% in late April. In particular, there's been a 23% drop in production at its Red Dog mine due to lower grades of zinc.
Endeavor Silver (NYSE: EXK) operates three silver-gold mines in Mexico, but it's also got three attractive development projects. Production has dropped and all-in sustaining costs have risen, leading to a negative cash flow. But the company has significantly reduced its debt, so it's future is anything but bleak.
By 2018, with development in the pipeline, this stock might be prohibitively expensive again because there is plenty of near-term growth potential here. It's also got further upside with zinc and should get a boost in this coming bull market. Catalysts include positive reserve estimates for its fifth mine, the Terronera silver/gold project in Mexico's Jalisco state.
Magna International (NYSE: MGA) is based in Aurora, Ontario. The global automotive supplier is gutsy and innovative--and definitely tuned to the obvious future--clean transportation. A great catalyst is its development of a combo electric/hydrogen vehicle--a fuel cell range-extended EV (FCREEV). It's not going to produce them (for now, at least) but plans to use the model to show off its engineering and design prowess and produce elements of the electric drivetrain and contract manufacturing.
The company's auto parts are distributed to heavyweights such as General Motors, Ford, Tesla, BMW, Toyota, Volkswagen and Chrysler. These huge deals provide a safe and steady profit stream for the company. It's insightful, forward-thinking and smart value/low cost for shareholders.
Hecla Mining (NYSE: HL) This one is a bit of a dramatic story. This stock shot up 6% when the company showed a whopping 1300% jump in Q1 profits , which saw net income rise to $16.73 million, up from $1.17 million in the first quarter of 2016. Helca beat analysts' expectations by a long shot.
And this was all despite a strike at Helca's Lucky Friday Mine in North Idaho, that was still ongoing when the stocks shot up on Q1 results, so we can expect a further catalyst in the form of NOT bad news.
Overall, the company was realizing higher prices for silver, lead and zinc. Oh, and Helca isn't just sitting back and waiting for the strike to end: It's using that time to make infrastructural improvements underground
By. Charles Kennedy
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This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that LION will complete its announced transaction to purchase the Nevada carbon exploration property; that graphite and graphene will have all applications and will be as much in demand in future as currently expected; that LION can fulfill all its obligations to exercise its Nevada property option; that LION's Nevada property can achieve drilling and mining success for graphite; that LION will close its MOU to buy a Madagascar mining licenses; that production can go online in the near term in Madagascar; that LION will obtain drilling permits on its Nevada and Madagascar properties; that the graphite in Nevada and Madagascar when produced will be high quality suitable for the tech industry; and that LION will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company may not agree on the final terms for the Madagascar property, even if it agrees it may not be able to finance its acquisitions of Nevada or Madagascar, it may not get regulatory approval for these acquisitions, aspects or all of the properties' development may not be successful, mining of the graphite may not be cost effective, LION may not raise sufficient funds to carry out its plans, changing costs for mining and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further test work may not be viable; additional high value mineral properties may not be available for LION to acquire, or LION may not be able to afford them; competitors may offer better technology than graphite technology for technology; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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