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Thursday, September 18, 2014

Lithium and Graphite miners begin to shine as Rockwood gets bought for 6.2B and Tesla announces it's "Giga Factory" for Lithium batteries

  Why we own Focus Graphite Shares

Focus Graphite has been one of our core holdings in the emerging electric car market and for graphene development. Here are 10 reasons why we bought into this Canadian junior.

1. Holds two properties containing strategically and economically important minerals
graphite and neodymium – needed for green initiatives, and; for European and U.S. national and
industrial security.

2. Economics: The Lac Knife graphite deposit holds the highest concentration of flake graphite in the world at 16%. And their positive Preliminary Economic Assessment (PEA, Oct ‘12) outlined robust economics: mine life of 20 years, $3.7 billion total net revenue, $926 million pre-tax undiscounted cash
flow, a 32% pre-tax IRR with a $246 million pre-tax NPV at a 10% discount rate. Lac Knife is anticipated
to go in production in early 2015

3. Supply conditions favor Focus Graphite. China controls the global market with over 70% of worldwide graphite production and with the United States producing no graphite, security of supply is critical.

 Super Capacitors printed on Graphene
4. Market applications favour the company. Future demand will be driven by green technology initiatives
in the Carbon Age - lithium batteries, electronics - and advanced technology-grade graphite applications and products and the discovery of the "miracle material" graphene!

5. The numbers tell the story. Current world production of graphite is approximately 1.2mt of which 40% is
flake graphite.

 To meet future estimated demand, some 25 new mines would be required by 2020.

6. Strategic implications will dictate future development. The U.S. and Europe are vulnerable to
graphite and neodymium shortages. Both the E.U. and the U.S. Government have designated graphite
as a critical mineral.

7. The Kwyjibo REE property has a strategic partner in the Government of Quebec through SOQUEM, a wholly–owned subsidiary of Investissement Quebec which is responsible for fostering economic development and job creation in Quebec.

8. The discovery of graphene will change the way we work, live and play in the future. At one atom thick, it is the strongest material known to science. It conducts electricity better than copper, is transparent, can be shaped to suit any form and can be modified to suit different industrial end-uses.

9. Graphene is most economical to produce from high quality, natural flake graphite such as that found at Lac Knife

 Graphene - the “new silicon” - provides limitless commercial opportunities through Focus Graphite’s
investment in Grafoid Inc. owns (40% ) 
Grafoid invests in, manages, and co-develops application solutions from economically scalable graphene.

10. Focus Graphite is positioned perfectly for long-term growth with the right resources, the right management and the right strategic partners as evidenced in its JV with Hydro-Quebec as technology partner in graphite purification and anode production.


Ed note:  We have been high on Graphite as a crucial material of the future of lithium batteries for some time now and also took positions in several other Graphite companies including Graftech Intl, Flinders Resources. Mason GraphiteLomiko Metals, and Berkwood Resources.

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