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  • Graphite Gains Ground: Major Announcements Show Projects Moving Forward 0 comments
    Nov 3, 2012 12:49 AM | about stocks: FCSMF

    Last spring was a tempestuous time for graphite watchers. Enthusiasm had built the previous year and climbed sharply through the early months of 2012. Cynics must have rejoiced not only to see stocks fall as they did, but when they did-almost coinciding with April Fool's Day. But for all that, companies persevered with both early-stage and more advanced projects. In the latter category, this week has seen a number of significant announcements.

    First off were Focus Graphite (OTCQX:FCSMF) with its PEA and Mason Graphite with its TSXV debut. Following closely were Northern Graphite's mine closure plan and Energizer Resources' final drill results prior to an initial resource estimate.

    With its October 31 MCP announcement, Northern Graphite hopes to begin production at its Bissett Creek Project in Q2 2014. Pending acceptance by Ontario's Ministry of Northern Development and Mines, and assuming financing falls into place, plant construction would begin next spring.

    "Production in Q2 2014 is an attainable goal and should coincide with improving economies, a recovery in the graphite market and higher graphite prices," the company stated.

    Northern describes the MCP as "an all-encompassing document that describes, in detail, the nature of the operations that will be carried out, the current baseline environmental conditions and the company's plan for rehabilitating the site and returning it to its natural state at the end of mining operations."

    The company estimated its financial assurance at $1.6 million "which reflects the relatively benign nature of the operation, neutral tailings and the ability to practice progressive rehabilitation due to the shallow, flat-lying nature of the deposit."

    The southeastern Ontario project has probable reserves of 18.977 million tonnes, but with an unimpressive 1.89% grade. Last April, however, CEO Gregory Bowes told ResourceClips that the grade was offset by "the high percentage of large flakes, the high purity, very low strip ratio, good infrastructure and the fact that our project is very scalable."

    Bissett Creek's July feasibility study projected annual production of 4.2 million tonnes averaging 2.22% carbon, for an average of 18,600 tonnes of concentrate grading 94.5% for the first five years. Total mine life is estimated at 23 years.

    About 80% of the mine's output will be +80 mesh large flake or better, the company stated. Approximately 50% will be extra-large (+50 mesh) and XXL (+32 mesh).

    Although Bissett Creek certainly ranks among the graphite projects closest to production, it hasn't met all its targets The company had hoped to file feasibility and mine closure reports in May and begin production by December 2013. Under previous ownership, the project underwent feasibility in the 1980s.

    Northern opened October 31 at $0.85 but slipped to a close of $0.79. By the November 1 close, Northern's shares had moved up to $0.82.
    On November 1 Energizer Resources released results from the last 23 holes and eight trenches of its Molo flake graphite deposit in Madagascar. The assays will be incorporated into an initial resource estimate expected by the end of November, which president/COO Craig Scherba said "looks to be the largest known graphite deposit in the world." A PEA is scheduled for year-end. The company plans pilot plant test work in South Africa to facilitate a feasibility study and provide samples for potential off-take agreements.

    The latest drill assays show good grades over impressive intercepts down to a depth of 304 metres. Some examples include:

    • 8.19% carbon over 246 metres
    • 6.36% over 278 metres
    • 5.71% over 304.5 metres
    • 6.35% over 261 metres
    • 7.02% over 219 metres
    • 6.6% over 184.35 metres
    • 7.89% over 128.4 metres

    True widths were not provided.

    Molo is part of Energizer's Joint Venture Property, in which the company holds a 75% interest and acts as project operator. Malagasy Minerals Ltd holds the other 25%. The JV Property surrounds on three sides Energizer's wholly-owned Green Giant Project, which was originally a vanadium project. A December 2011 graphite find prompted the company to change focus and negotiate the JV.

    Like Northern, Energizer has missed some targets. The company had hoped to release its initial resource last summer and a PEA in September or October. The upcoming PEA will be conducted by DRA Mineral Projects, which last March picked up a 1.6% interest in Energizer and an option to acquire up to 5% in total.

    Molo production is now targeted for 2015 for an open pit comprising three 50,000-tonne modules. The plan is to begin production at 50,000 tpa, with the ability to quickly expand up to 150,000 tonnes.

    Wnergizer opened November 1 at $0.34 then dropped to $0.325, but closed the day at $0.35.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: FCSMF
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