Why Graphite Mining is Headed for a Global Bull Run

Graphite production in North America is set to explode. Ever since Tesla (NASDAQ:TSLA) CEO Elon Musk revealed that lithium ion makes up less than 2% of a battery, and that a lithium ion battery is “mostly nickel and graphite,” savvy investors have been googling graphite like mad. Lithium miner Albemarle Corp. (NYSE:ALB) saw a 3.7% premarket drop this week as Morgan Stanley downgraded shares, and forecasted lithium prices to fall 45% by 2021. Miners of the mineral nickel, like Lundin Mining Corp. (TSX:LUN) and Garibaldi Resources (TSXV:GGI) are already seeing an explosion in investor interest – by the end of 2017, Garibaldi had seen growth of 2,351%, and was just named number-one stock to watch on the TSX Venture 50 list.

The most graphite-rich geography in North America is in Québec, and a junior mining company already on the move in the market is Graphite Energy Corp. (CSE:GRE) (OTC:GRXXF).

This bodes well for the future of graphite, the other half of the nickel and graphite equation, and the mineral is now showing up on mining investors’ radars, but stocks are still trading low. Benchmark Mineral Intelligence predicts that demand for Graphite is set to increase 200%. With exploration and construction already completed, drilling is set to begin on March 10 on its Lac Aux Bouleaux Graphite property.

China Loses Market Share, Opens Graphite Production Opportunities in the West

In 2016, China controlled 66% of the world’s graphite production. Now China is cutting back on many strategic mineral exports, including graphite. Why? China’s production process of producing synthetic graphite is extremely detrimental to the environment. EV Corporations, like Tesla, whose identities rely on a “green mentality” , will be much more inclined to purchase graphite from North American sources that produce natural graphite flakes that do not pollute the air. And while China regroups, the west has an extraordinary window of opportunity to build a new, fully domestic resource supply chain, reducing the foreign dependence that dominated the fossil fuel era.

It is vital that the North American mining industry taps its natural graphite resources to reduce dependence on foreign producers, especially as the dominant producer – China – has had to take a step back due to environmental regulations.

Graphite Investing News reported that between mid 2016 and late 2017, prices for fine flake graphite rose by 36%, hitting an average of $863 per tonne, while medium-flake prices increased by 31% to reach $953 per tonne.

With reports of consistently rising valuation, it is clear that North American graphite producers have a massive untapped resources, and that is why North American graphite companies, such as Graphite Energy, are putting resources into extracting exploration data.

Other mining juniors are beginning the discovery and exploration phases at project sites in Québec and Alaska. Graphite Energy Corp.. is already ahead of the competition because they have completed the exploration phase, and actual drilling is set to begin, positioning the company as a potential frontrunner in graphite production in North America.

Exploration data already shows the property contains a high proportion of large graphite flakes – and that is the most commercially valuable form of mineralization. The company’s technical report, authored by a consulting geologist at Hinterland Geoscience and Geomatics, confirms the presence of large flake graphite mineralization on the property.

Technical reports have confirmed that Graphite Energy’s Lac Aux Bouleaux propertyhas a sampling grade of 22%. Considering that in the graphite mining industry even a 5% grade is considered viable and valuable, this is like ‘striking gold’.

The site is located right next to the Imerys graphite producing mine, which is the largest and most prolific producing graphite mine in North America. It is already confirmed that the Lac Aux Bouleaux (LAB) Graphite Property is comprised of a contiguous block totaling 1,824 acres, in an area where the graphite grades are among the highest in the world.

With the drills assembled and due to break ground early next month, Graphite Energy is positioned to move graphite to market faster than other junior mining companies.

Supplying Clean Energy to Domestic Markets

Clearly, graphite is a rising commodity of the future because it is a key element in breakout technologies affecting global economic and environmental changes that are coming as the world looks for ways to reduce emissions.

Gold Stock Trades publisher Jeb Handwerger told Business Television, “today’s industrial based economy has entered a new age of sustainable energy focused on strategic mineral production. Of all the strategic minerals in play, Graphite offers the greatest opportunity for growth, as it is a key element required for the extraordinary growth of the lithium ion battery sector.”

A MINING.com study forecasts that battery-technology metals will out-perform precious and base metals in 2018. With the demand for graphite growing on global scale, the key to success will be processing the graphite to meet the needs of the battery manufacturers, as graphite companies begin to see a major boost in production demand.

Deloitte’s 2018 Tracking Trends in Global Mining Report highlights graphite as a commodity currently in the spotlight. Like lithium, its demand is linked to battery power and storage, driving analysts to predict that demand for battery-grade graphite will triple by 2020. While China supplied just under 70% of the graphite used in 2016, rising costs, grade depletion, and stricter environmental regulations may see the country’s share of the market drop.

With demand hitting its stride, and the global supply chain disrupted, the race to mine and produce graphite in North America is on, and smart money bets on the producer who can get product to market first. While graphite has been revealed as a key commodity of the future, investors have an opportunity to get in while stock prices are still trading low.

The future is bright for graphite mining companies in North America, but especially so for Graphite Energy Corp. (CSE:GRE) (OTC:GRXXF), as the company is emerging as the first junior set to begin drilling.

Comparables:

Tesla, Inc. (NASDAQ:TSLA) formerly Tesla Motors, is an American company specializing in electric automotives, energy storage and solar panel manufacturing. Founded in 2003 by CEO Elon Musk and based in Palo Alto, California, the company specializes in electric cars, lithium-ion battery energy storage, and residential photovoltaic panels through its subsidiary company SolarCity. Tesla CEO Elon Musk has said that he envisions Tesla as a technology company and independent automaker, aimed at eventually offering electric cars at prices affordable to the average consumer.

Albemarle Corp. (NYSE:ALB) Albemarle has lithium mining operations worldwide. In Chile, the company is producing 125,000 tonnes of lithium carbonate per year at the Atacama salt flat. In the U.S., Albemarle is working the Silver Peak lithium brine mine in Nevada, which it purchased through the acquisition of Rockwood Lithium in 2015. It’s estimated that over 300 million pounds of lithium carbonate have been produced at this mine since 1966.

Lundin Mining Corp. (TSX:LUN) Lundin Mining is a diversified Canadian base metals mining company with operations in Chile, the United States of America, Portugal, and Sweden, primarily producing copper, nickel and zinc. Lundin Mining holds an indirect 24 percent equity stake in the Freeport Cobalt Oy business. The company was founded in 1994 by Adolf Lundin, and is headquartered in Toronto.

Garibaldi Resources Corp. (TSX.V:GGI) is an active Canadian-based junior exploration company focused on creating shareholder value through discoveries and strategic development of its assets in Mexico and British Columbia. One of Garibaldi’s primary focuses is its E&L Nickel Mountain project in BC’s Eskay Camp, where the company began drilling in August 2017. Garibaldi took the number-one spot on the Venture 50 list across all five sectors. The company had seen growth of 2,351%, putting its market cap at over $238 million.

For more information on Graphite Energy (OTC:GRXXF; CSE:GRE), please visit Microsmallcap.com for a free research report.

Disclaimer

Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this article is not provided to any individual with a view toward their individual circumstances. Baystreet.ca has been paid a fee of one thousand eight hundred dollars for Graphite Energy company advertising. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this newsletter as the basis for any investment decision. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.