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Falcon’s Chief Executive Officer, Issues Corporate Update Letter

Falcon Gold Corp. (TSXV:FG)(GR:3FA)(OTCQB:FGLDF); ("Falcon" or the "Company") is pleased to announce a corporate update letter to shareholders in an address from its Chief Executive Officer Karim RayaniDear Shareholders:As a new year begins, I would like.

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Falcon Gold Corp. (TSXV:FG)(GR:3FA)(OTCQB:FGLDF); ("Falcon" or the "Company") is pleased to announce a corporate update letter to shareholders in an address from its Chief Executive Officer Karim Rayani

Dear Shareholders:

As a new year begins, I would like to share some of our successes over the past year and objectives for the ensuing year. With the world scale pandemic continuing its attack on the globe, it can be sometimes hard to discern the clear road ahead. Despite all that is happening, my commitment remains the same to our Company since the first day I signed on as Chief Executive Officer. My focus is and always has been on creating shareholder value, and it will be no different as we embark on a new year. I'm very pleased with Falcon's progress during 2021, we have a clear roadmap going into 2022 and we are committed to continuing that success.

Central Canada Project

We continue to make great progress at the historic Central Canada gold mine trend in the developing Atikokan camp. This flagship project lies just 20 kms southeast of Agnico Eagles Hammond Reef Deposit which hosts a measured resource of 3.32 million ounces of gold.

Falcon has completed two successful rounds of drilling that complement and validate the historic workings as we work towards our main goal of delineating a resource. In addition to the extensive mapping and sampling of outcrop exposures of the Central Canada mine trend, Falcon has received the reinterpretation of the 2021 heliborne high-resolution magnetic and time-domain electromagnetic survey utilizing artificial intelligent (AI) computer analyses. This type of AI system is an evolving and promising application that may be capable of identifying areas of complex folding and faulting and could accelerate the process of deciphering and modelling the complex structural setting of the property.

Through our past year exploration efforts, we are now pleased to report that the Central Canada Mine trend has been extended to a strike length of over 140m. This mine trend includes the historical J.J. Walshe Shaft. Detailed mapping and sampling across the property also resulted in new discoveries of the Sugar Shear, Monte, Honey, and Hoist Zones. The Sugar Shear returned grab sample results up to 23 g/t Au and has been traced on surface for over 360m and presents a previously undocumented target of high merit for future exploration efforts (Figure 1).

Figure 1. Gold-bearing zones of the Central Canada gold project.

The company is now ready to begin an exciting chapter in its future exploration efforts at Central Canada. Plans are in place to begin a Phase 3 drilling program. The objective of the drilling will be to target the gold mineralization in the J.J. Walshe shaft area and to test other strong gold-bearing zones such as the No. 2 Vein, the Sugar Shear Zone and drill the Honey Zone. As the snow melts in the spring, summer programs will consist of further mapping, ground-truthing the targets of merit highlighted by the AI analyses, stripping and a Phase 4 drill program scheduled for the fall of 2022.

Newfoundland Acquisitions

Falcon continues to search out opportunities and build value by project generation and has made a number of acquisitions in Central Newfoundland as of late. The Hope Brook and Baie Verte Projects are the first in a number of announcements to come. Both these acquisitions are very strategic in our long-term objective of securing key areas that have seen little historical exploration and host structural similarities to the recent success of the Newfoundland exploration boom. The ever-evolving understanding of the geological nature of the central Newfoundland gold belt is also presenting opportunities through the success of First Mining, Sokoman-Benton JV and Matador Resources which all have a large presence in the area with defined resources. Matador's Cape Ray deposit hosts 837,000 ounces of Au at an average grade of 2 g/t and is contiguous to Falcon's ground. First Mining's Hope Brook project located to the south of Falcon has a resource of 5.5 million tonnes containing 844,000 ounces Au grading 4.77 g/t. Falcon's claims are located along the same structural trend as the Hope Brook Project.

Not only known for its gold the Hope Brook camp is quickly becoming an area of interest for lithium, just recently the Benton - Sokoman JV announced the first lithium-bearing pegmatite discovery located 400m meters away from our property boundary. Recent geophysical interpretation shows the same controlling structures that host the Kraken Pegmatite dyke swarm discovered by Benton-Sokoman extend onto Falcon's ground. Falcon now controls a large footprint in the Hope Brook camp of the southern central Newfoundland gold belt along key structural trends and the discovery of lithium in the area presents an additional layer of potential success for more discoveries. The Company has applied for the necessary permitting and is looking forward to mobilizing crews as soon as conditions allow.

Falcon's Baie Verte project consisting of 13,700 hectares is located along the Baie Verte Brompton Line (BVBL) of the central Newfoundland gold belt. The BVBL is a major crustal scale structural feature and through the Baie Verte peninsula and currently hosts all of Newfoundland's gold production. Current producing mines include Anaconda Mining Inc.'s Point Rousse gold mine and Rambler Metals Mining operations. Former producing mines include the Terra Nova mine and deposits of the Rambler mining camp. All these current gold mines and former producers are in close proximity to the Baie Verte Brompton line. Additionally, there are more than 100 gold prospects along the BVBL, and Falcon has taken advantage of this key structural corridor having acquired ground over a 70 km strike length.

On November 17th Falcon announced a strategic partnership with Marvel Discovery in the Hope Brook camp of the central Newfoundland gold belt. Called the Golden Brook, this strategic alliance covers additional ground along the Baie Verte Brompton Line. The 50-50 joint venture between Falcon and Marvel now brings total landholdings to 115,000 hectares. This alliance provides numerous upside potential to both companies including synergies of shared capital and administration costs while collectively targeting those areas of high merit for a Tier 1 gold discovery that is not hampered by property boundaries.

The newly formed JV also controls strategic ground 13 kilometers (km) southwest of the Glover Island (GI) trend. The GI trend is an 11km mineralized corridor host to 17 base metal, polymetallic mineral prospects and numerous gold showings and anomalies. The GI trend hosts the Lunch Pond South deposit with inferred resources of 120,000 ounces of gold. Not only known for its base and precious metals, the GI Trend and BVBL corridor contains the Four Corners project which hosts an apparent large iron-titanium-vanadium bearing deposit owned by Triple Nine Resources. This deposit has thus far been outlined for over 3km in length with widths of up to 200m and to a depth of 600m. The Falcon-Marvel JV is well positioned along this important mineralized corridor and by combining exploration strategies and synergies is well poised for success.

British Columbia Projects:

Gaspard Claims

Falcon announced on February 4, 2021, the acquisition of the Gaspard Gold Claims near Spences Bridge. The Gaspard claims are located in what may be an extension of the Spences Bridge gold belt. The Spences Bridge gold belt is host to several significant developing gold deposits such as Westhaven Gold Corp.'s Shovelnose gold project and the Blackdome Zone gold-silver deposit owned by Tempus Resources. The former Blackdome mine produced 225,000 of gold at an average grade of 20 g/t Au. The Blackdome has a reported resources of 144,500 tonnes with an average grade of 11.29 grams per tonne gold and 50.01 g/t silver, and an inferred resource of 90,600 tonnes grading 8.79 g/t gold and 18.61 g/t silver (Tempus Resources Ltd.) The Blackdome is classified as low-sulphidation epithermal gold and silver mineralization and represents a similar target type for the Gaspard claims.

Historical exploration programs at Gaspard reported anomalous heavy mineral concentrate stream sediments returning grades from 94 parts per billion gold to 5,910 parts per billion gold within four adjacent streams. This defines a continuous gold anomaly over an upstream distance of 1.8km. To date, Falcon has completed its first phase of exploration to delineate and investigate the styles of gold mineralization associated with this stream sediment anomaly.

Falcon has fulfilled its obligations in expenditures during the 2021 field season and now controls 100% interest in the project.

Sunny Boy-Spitfire

On August 09, 2021, the Company announced the commencement of Phase 2 exploration efforts at the High-Grade Sunny Boy-Spitfire project near Merritt B.C. The company's first phase in 2020, was successful in identifying gold mineralization over a 300-metre strike length through grab and channel sampling. Highlights of the September 2020, sampling program were a 2.2 m channel sample that averaged 59.8 g/t Au which included a one meter channel sample that assayed 122 g/t Au. Both channel samples were taken from the Master Vein.

In 2021 Falcon's second phase of exploration consisted of packsack drilling along the Master Vein and parallel mineralized horizons.

Highlights of the 2021 exploration efforts include:

  • Grab samples on the Master vein ranging from 1.09 g/t Au to 168 g/t Au and 17.5 g/t silver and 0.7 per cent Cu;
  • Backpack drilling from surface of 68.7 g/t Au and 11.8 g/t Ag over a drilled intersection of 0.47 m;
  • A grab sample from Vein 2 reporting 1.52 g/t Au;
  • A grab sample from Vein 3 reporting 2.58 g/t Au and 1.2 g/t Ag.

Falcon Gold is very encouraged by the results of the pack-sack drilling and sampling along six parallel vein structures with anomalous to high grade gold results in every sample reported. Due to visible gold noted in many of the samples, Falcon has commissioned total metallics gold analyses to determine the effect of the nuggety nature of gold may have had original fire assay method results. These values will be released once they have been obtained.

Alex Pleson, P.Geo. Dispute

On November 23, 2021, the Company filed a lawsuit in the Supreme Court of British Columbia against Alex Pleson, P.Geo (PGO) of Pleson Geoscience of Ontario Canada. Mr. Pleson failed to transfer claims he staked on behalf of the company and did not report the work he performed for the company to the standards expected of a professional geoscientist. The lawsuit does not affect any of our plans moving forward and the company is optimistic the matter will be solved in a timely manner.

Viernes Project, Northern Chile

On December 16,2021 Falcon signed a definitive option to-purchase agreement on the Viernes Project. The Viernes project is located 122km southeast of Antofagasta city in northern Chile. The claims encompass 13 claim blocks covering 3,300 hectares and are directly adjacent to Yamana's El-Penon gold-silver mine. Production from the El-Penon in 2021 was 160,000 ounces of gold and 5,000,000 million ounces of silver. The property is also located 30 km from the Escondida copper-gold porphyry cluster operated by BHP and Rio Tinto.

Since the 1990's this area has produced 30.6 million tonnes of copper (57 times the annual Canadian production), 9.2 million ounces of gold (1.5 times the annual Canadian production) and 129.3 million ounces of silver (8.6 times the Canadian annual production) through multiple world class discoveries. Terms of the option to-purchase agreement are subject to TSX Venture Exchange policy.

Latamark Resources formed; South America Issuer planned

On October 7,2021 the Company formed Latamark Resources Corp., a wholly owned subsidiary of Falcon Gold., The company intends to spin out its Argentine gold asset located in the renowned Sierra de Las Minas district of southern La Rioja province in San Juan. The district is reported to host several formerly producing gold and silver mines.

On Feb. 9, 2021, the company was able to reinstate the property option for a reduction from the original agreement. The original terms were calling for escalating annual payments over a six-year term totaling $500,000 (U.S.) and the issuance of four million common shares with property expenditures of US$1.74 million Falcon was successful in reworking the terms to share payments of 500,000 common shares plus 500,000 warrants to be paid to the vendors and by spending US$350,000 in exploration expenditures to earn an 80-per-cent interest in the project. Upon completion of payments and expenditures, Falcon will hold an 80-per-cent interest and the vendors would retain 20-per-cent ownership in the property. For a 30-month period following acquiring 80% Falcon reserves the right to purchase the vendors' 20% remaining interest for a further payment of two million Falcon common shares and a one-time US$1.5-million payment. The vendor retains a 2% NSR with a buyback clause of 1% for $$$$$ which Falcon Gold can elect to do so at any time.

The company will update shareholders in the coming weeks on the necessary requirements for shareholder approval. Falcon can make no assurances that a spinout will take place as it is subject to several conditions that include board approval, satisfying the TSX Venture requirements, legal and tax ramifications, determining the final details of the transaction, receipt of all regulatory approval, the availability of financing for the new subsidiary, and the overall market conditions. The company will be providing further details in the coming weeks.

In Closing

The Company is looking forward to a robust exploration season in 2022. Falcon continues to build value for stake holders by acquiring, advancing, and exploring opportunities in the Americas. The Company is continuing to build upon the historic results and new discoveries at the Central Canada project as we complete further drilling, modeling, and resource delineation. The recent acquisitions in Newfoundland which is witnessing the largest exploration boom and discoveries in history is testament to Falcon recognizing where opportunities for success are the highest. Strategies in Chile are opportunistic in building shareholder value in the largest copper producing areas in the world. Copper demand is expected to increase dramatically in the near future as the world turns to green metal energy. We believe that Falcon presents incredible upside potential in 2022 when currently valued at such a low market capitalization as compared to some of our peers in the same jurisdictions. We thank all our current shareholders for their continued support and look forward to rewarding them with success.

Wishing you the best for 2022.

Cordially,
Karim Rayani

About Falcon Gold Corp.

Falcon is a Canadian mineral exploration company focused on generating, acquiring, and exploring opportunities in the Americas. Falcon's flagship project, the Central Canada Gold Mine, is approximately 20 km southeast of Agnico Eagle's Hammond Reef Gold Deposit which has currently estimated 3.32 million ounces of gold (123.5 million tonnes grading 0.84 g/t gold) mineral reserves, and 2.3 million ounces of measured and indicated mineral resources (133.4 million tonnes grading 0.54 g/t gold). The Hammond Reef gold property lies on the Hammond shear zone, which is a northeast-trending splay off the Quetico Fault Zone ("QFZ") and may be the control for the gold deposit. The Central Gold property lies on a similar major northeast-trending splay of the QFZ.

The Company holds 8 additional projects. The Esperanza Gold/Silver/Copper mineral concessions located in La Rioja Province, Argentina. The Springpole West Property in the world-renowned Red Lake mining camp; a 49% interest in the Burton Gold property with Iamgold near Sudbury Ontario; and in B.C., the Spitfire-Sunny Boy, Gaspard Gold claims; and most recently the Great Burnt, Hope Brook, and Baie Verte acquisitions adjacent to First Mining, Benton-Sokoman's JV, and Marvel Discovery in Central Newfoundland.

CONTACT INFORMATION:

Falcon Gold Corp.

"Karim Rayani"

Karim Rayani
Chief Executive Officer, Director
Telephone: (604) 716-0551
Email: info@falcongold.ca

Cautionary Language and Forward-Looking Statements

This news release may contain forward looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, etc. Forward looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

This news release may contain forward looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, etc. Forward looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Falcon Gold Corp.



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Economics

Taylor Wimpey share price up 3% as housebuilder promises to return more cash to investors

The Taylor Wimpey share price has risen by 3.3% today, reversing some of the…
The post Taylor Wimpey share price up 3% as housebuilder promises to return more cash to investors first appeared on Trading and Investment News.

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The Taylor Wimpey share price has risen by 3.3% today, reversing some of the losses taken over a bad start to the year that has seen the housebuilder’s valuation decline by over 10%, after the company today promised investors it would return more cash to them over coming months. The windfall comes as a result of what Taylor Wimpey described as an “excellent” 2021.

Demand for larger properties, especially houses with gardens, has leapt as a result of the pandemic. As well families spending more time at home desiring more space, buyers were further encouraged to take the leap by the stamp duty holiday that ran from 2020 until late last year, offering savings of up to £15,000. Rock bottom interest rates and fierce competition between providers also led to cheaper mortgages which helped maximise selling prices.

taylor wimpey plc

The combination of favourable headwinds means the homebuilder expects to now realise an operating profit of £820 million for 2021 from the sale of a little under 14,000 homes. That represents a growth of 47% in the number of new-built properties delivered compared to 2020, when construction work and administrative processes were delayed by Covid-19 disruption.

As a result, Taylor Wimpey finished last year with a bank balance of £837 million. It will now, it says, see how much cash is left once it has paid out its dividend and planned for expenses over the rest of the year. Any “excess cash” surplus will be returned to shareholders, most likely through a major share buyback. The company will confirm details alongside its full-year results, due to be reported in March.

Taylor Wimpey is worth around £6 billion and is a member of the FTSE 100. It has existed in its present format since 2007 when created out of a merger between the housebuilders George Wimpey and Taylor Woodrow. The deal was legendarily struck by current chief executive Pete Redfern at a service station on the M40.

Despite sector concerns over how much it will cost to replace dangerous cladding used on buildings over the past 20 years and now banned as a result of the Grenfell Tower scandal, Taylor Wimpey has repeatedly stated it is confident the £165 million it has set aside to cover related expenses will suffice. It has been challenged on the sum but still considers it a “reasonable estimate”.

If the cladding provision does prove sufficient, that should leave plenty of cash for redistribution to investors through a major share buyback over 2022.

The post Taylor Wimpey share price up 3% as housebuilder promises to return more cash to investors first appeared on Trading and Investment News.

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VIDEO — Eric Nuttall: Oil in Multi-year Bull Market, Supply Crisis Coming

Eric Nuttall: Oil in Multi-year Bull Market, Supply Crisis Coming

youtu.be

Supply and demand fundamentals show oil is in a multi-year bull market with a supply crisis in the works.That’s according to Eric Nuttall, partner and senior portfolio manager…

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Eric Nuttall: Oil in Multi-year Bull Market, Supply Crisis Coming youtu.be

Supply and demand fundamentals show oil is in a multi-year bull market with a supply crisis in the works.

That's according to Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners. He manages the firm's Ninepoint Energy Fund, which he said was the best-performing energy fund of 2021.

"The risk/reward for me in the sector is incredible," he told the Investing News Network in an interview. "My biggest challenge is everything looks good — large caps look good, small caps look good. Oil looks good, natural gas looks good. Services look good, offshore drilling looks good — everything looks good."


Nuttall said supply-side factors are key for oil right now, and explained that there are three main baskets to keep in mind: US shale, the Organization of the Petroleum Exporting Countries (OPEC) and the rest of the world.

Looking at 2022, he said US shale is no longer experiencing hypergrowth, meaning that production will grow, but will no longer exceed global demand growth. Meanwhile, OPEC is getting close to using up its spare capacity.

"By the end of this year I believe we will exhaust OPEC's spare capacity, and that will be the most bullish catalyst for oil in easily the last decade," Nuttall said during the conversation.

The "rest of the world" category includes major oil producers like Shell (NYSE:RDS.A,LSE:RDSB) and BP (NYSE:BP,LSE:BP), which Nuttall said have invested insufficiently in new production since 2014, and as a result will effectively post no growth until the end of the decade.

In terms of what that means for prices, Nuttall said it's tough to give a 2022 forecast due to variables like COVID-19, but he thinks oil will be "well in excess" of US$80 per barrel this year, with a shot at making it to US$100. Looking out further, he sees a new all-time high of US$140 to US$150 in the cards for oil.

"I feel very confident that we're in a multi-year bull market for oil. Energy stocks, despite the run, still in my opinion represent a generational opportunity due solely to energy ignorance — people frankly are clueless in terms of how oil is used and how long it's going to take to displace," he explained.

"We will all be consuming oil for the rest of our lifetimes, and yet that fear of peak demand is leading to a reality of peak supply. The writing is on the wall: We're heading towards an oil supply crisis."

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Graphite Outlook 2022: Demand from Battery Segment to Remain High

Click here to read the previous graphite outlook. Graphite is an essential raw material used in electric vehicle (EV) batteries, and as sales of EVs grow, market watchers believe demand for the metal will surge. Despite discussions about battery chemistry

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Click here to read the previous graphite outlook.

Graphite is an essential raw material used in electric vehicle (EV) batteries, and as sales of EVs grow, market watchers believe demand for the metal will surge.

Despite discussions about battery chemistry changes, many experts think graphite will remain a dominant element in EV batteries for at least the next decade. Both synthetic graphite and natural graphite, in the form of the intermediate product spherical graphite, are used in the anodes of lithium-ion batteries.

Here the Investing News Network (INN) looks at the key trends in the graphite market in 2021 and what the graphite outlook is for 2022.


Graphite trends 2021: Shipping and power cost challenges


After a tumultuous 2020 in which supply chains were put to the test as economies shut down due to the coronavirus pandemic, graphite kicked off 2021 on a bright note.

In early 2021, prices for natural flake graphite were slightly higher than expected as a result of unexpectedly strict environmental investigations and closures in China, Suzanne Shaw of Wood Mackenzie told INN back in July.

“There was also considerable shipping disruption early on in the year with containers and vessels not where they should be as routes reopened post-COVID,” she said. “Limited availability was prioritized for higher-value cargos, with lower-value raw materials flows disrupted. This situation subsided through Q2.”

Pricing was relatively flat during the first six months of 2021, according to Benchmark Mineral Intelligence data.

“Prices for +100 mesh flake concentrate, across all purities, have moved upward by around 5 to 10 percent year-to-date, while pricing for all other grades has moved less than 5 percent so far this year due to continued structural oversupply in the graphite market,” Miller told INN at the end of H1. “Moreover, the global shipping situation at the moment is hindering upward price pressure.”

Prices took a turn in August, jumping on the back of the energy crisis, which hit producers and disrupted output. Battery grades were particularly hit by rising power costs as both the manufacture of synthetic graphite and the processing of spherical graphite from natural flake are known for their high levels of energy consumption.

In terms of supply, Chinese production was expected to ramp up to meet rising domestic battery demand, as there is still a lot of overcapacity in China.

“However, the overall trend is that China is showing less appetite on the raw material side and investing in higher-value downstream industries rather than exploration/mining across most mineral sectors,” Shaw said at the end of H1. “It will continue to increase its own imports of flake graphite.”

Meanwhile, on the synthetic graphite front, the market could be driven into a deficit as a result of increasing demand from the lithium-ion battery and downstream EV sectors worldwide, Roskill, which was acquired by Wood Mackenzie, reported back in August.

“From a performance perspective, EV automakers prefer synthetic graphite, citing its superior fast charge turnaround and battery longevity,” a November Fastmarkets report reads. “Synthetic graphite, however, is costly, power intensive and environmentally unfriendly, with supply centered in China at odds with North American and European automakers’ desire for more localized supply.”

Graphite outlook 2022: What’s ahead


At the end of last year, analysts were expecting demand from the battery segment to continue to grow on the back of increased EV sales, with growth opportunities for both synthetic and natural graphite.

According to Benchmark Mineral Intelligence data, demand for natural graphite from the battery segment amounted to 400,000 tonnes in 2021, with that number expected to scale up to 3 million tonnes by 2030. Meanwhile, demand for synthetic graphite reached about 300,000 tonnes in 2021 and it’s expected to increase to 1.5 million tonnes by 2030.

“We do expect recycling to plug some of these gaps, but this isn't really likely to reach the necessary scale until post 2030,” Miller said in a December webinar. “So at the moment, the focus is really on synthesizing and mining this material as quickly as possible to meet the demand that we might see into the future.”

By volume, graphite is one of the most important elements in any electric vehicle battery ― there is between 50 and 100 kilograms of graphite, whether synthetic or natural, present within each vehicle.

“We can really see the sector growing progressively to around 15 times the demand we see today by 2030, outpacing moderate growth and demand from industrial applications,” Miller said.

That said, it's important to note that only certain types of natural graphite supply are relevant to and able to be qualified for the lithium-ion supply chain.

“This is really the biggest challenge in using natural graphite as a battery input,” Miller said. “This has the potential to exclude further capacity from projects in development.”

The expert explained that if all planned supply reached the market, it would have the potential to balance out demand up to 2029 to 2030, but with these limitations on which material can be qualified, the story takes a different direction.

“The primary limitation here is the mesh size inputs for the battery supply chain must be fine to medium flake,” Miller said, adding that consistency and high purity, somewhere around 94 to 95 percent carbon, is also key. “Flake graphite for the lithium ion supply chain must have low levels of impurity in order to avoid compromising the quality and longevity of the end product.”

According to Benchmark Mineral Intelligence, today, synthetic graphite anodes make up the majority of market share and approximately 57 percent of the anode market.

“Going forward, we do expect this to shift in the direction of natural graphite anodes to around a 50-50 balance for a multitude of reasons,” Miller said. His reasons include tight graphitization capacity, higher costs for synthetic graphite anode material and also the environmental shortcomings of the synthetic graphite supply chain at the moment.

Graphitization is the process of producing synthetic graphite from carbon-rich, oil-derived feedstock raw materials, and this process is energy intensive.

“In China, graphitization capacity has been mainly located in Inner Mongolia, a province which has some of the lowest energy costs in the country and where other high-energy metal producers, such as ferro-chrome smelters, are based,” Fastmarket reports. “But Inner Mongolia was the first in the firing line when the 2021 energy crisis unfolded.”

This resulted in reduced production and unpredictable cost increases for synthetic graphite, and the reason why many battery manufacturers in China could turn to natural graphite instead.

Looking ahead at how overall demand for graphite will perform, Benchmark Mineral Intelligence expects the battery segment to challenge industrial applications as the leading end-market for graphite demand. Over the next decade, anode demand will grow at an average of 27 percent compound annual growth rate (CAGR).

“Unlike some of the other critical mineral markets, there is still time for both the natural and synthetic graphite market deficits to be redressed — so long as adequate funding is provided for junior miners in the near term,” Miller said.

Commenting on price performance, Fastmarkets maintains the view that both flake and spherical graphite prices will trend stable to higher in the near term.

“The only potential reprieve we see for graphite prices would be if the power constraints diminish EV lithium-ion battery production, and in turn reduce demand for graphite anodes sufficiently to stem the upward pressure on graphite prices,” analysts said.

Another key trend for graphite investors to watch in the new year is how western automakers keep up with China, which has become the dominant player in all steps of the anode supply chain.

Interestingly, before 2021 came to an end, US-based Tesla (NASDAQ:TSLA) made a move to secure graphite supply from top graphite producer Syrah Resources (ASX:SYR).

The ASX-listed company will process graphite from its Balama mine in Mozambique in its Louisiana plant, and will supply the EV maker with anode graphite material for an initial four year period. Tesla also has an option to offtake additional volume subject to Syrah expanding its capacity beyond 10,000 tonnes per year.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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