Northern Graphite Corporation is an Ottawa-based, Canadian mine development company that is listed on the TSX Venture Exchange under the symbol “NGC” and also trades on the OTCQX under the symbol “NGPHF”.
Northern Graphite was the first junior company to recognize that graphite was set to emerge as a strategic mineral five years ago, and it is still widely regarded as the industry leader. Northern Graphite is the only public graphite company with a truly large flake deposit and it is the only one to have completed a bankable final Feasibility Study and received its major environmental permit. It is also the only graphite junior to have demonstrated that its graphite can be economically upgraded to “spherical graphite” for use in lithium ion batteries.
The Company’s Bissett Creek project is located 100km east of North Bay, Ontario and 15km from the Trans Canada highway. Bissett Creek has the best infrastructure of any new greenfields graphite project which contributes to it also having the lowest capital cost and the lowest unit operating cost. Northern anticipates that it will be in a position to begin construction of the mine in late 2014, and be in production in late 2015, subject to the availability of financing.
China produces 70% of the world’s graphite and its production and exports are declining, and costs increasing, as mines get older and deeper, the industry modernizes and consolidates, and strict environmental and operational regulations are imposed. In addition, export taxes and a licensing system have been instituted. Due to “security of supply” issues both the European Union and the USA have named graphite a supply critical mineral.
Graphite prices increased substantially from 2005 to 2012 due to the ongoing industrialization of China and other emerging economies and resultant strong demand from traditional steel and automotive markets. However, new applications such as lithium-ion batteries, fuel cells, vanadium redox batteries and nuclear power have the potential to create significant, incremental demand growth in the future. The use of li-ion batteries in particular is growing rapidly in consumer electronics and power tools and demand from this sector already accounts for over 20% of the flake graphite market. This growth will continue with the increased use of hybrid and all electric automobiles. While graphite prices have declined over the last year due to weakness in the European, US and Chinese economies, the supply situation will be more severe when economies rebound as no new mines were built during the last cycle and the existing production base is aging and getting higher cost.
With an advanced, large flake deposit located close to infrastructure in a politically stable jurisdiction, Northern Graphite is well positioned to benefit from a strong recovery in graphite demand and prices.