Flinders Resources (CVE:FDR) intends to complete Stage 1 plant and mine commissioning, and graphite production at its Woxna operation in Sweden to become a top graphite supplier for the lithium ion battery energy storage market.
Flinders boasts a solid cash position of C$4 million despite four year lows in natural flake graphite prices. Lower global flake graphite demand in 2015 has pushed prices to down less than US$700/tonne.
Indeed, Flinders has decided to decrease graphite production, despite the Woxna project's ability to produce graphite to grade and recovery specifications at competitive cash costs, until the market allows for higher profit margins. By reducing production, Flinders will lower its expenditure to less than C$150,000 a month.
But, Flinders will still keep its competitive advantage, maintaining production readiness and conserving capital by resuming the supply of larger volumes when improved graphite prices return. The plant is currently undergoing a scheduled summer maintenance shutdown.
"The first stage of our growth strategy is now complete, which has uniquely placed Flinders as the only western producer of natural flake graphite. We are now in a strong position to implement the second stage, to place the Company as a supplier of choice for the rapidly expanding and game changing lithium ion battery energy storage. The Company has been working on optimizing a flow sheet to produce high purity graphite that was substantially developed in the early 2000's by the previous owner of the Woxna project, as well negotiating with existing high-purity technological providers. We will provide further information as the high purity project progresses," said Flinders' president and CEO, Blair Way.
Flinders' Woxna graphite project in Sweden covers four separate mining concessions and holds measured and indicated graphite resources of 7.7 million tonnes at 9.3% Cg.
Flinders is the only western producer of graphite, resumed production at its Woxna mine in 2014 in order to address demand from Germany, proving that it can produce graphite competitively to customer specifications.