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’s principal asset is the Bissett Creek graphite project located 100km east of North Bay, Ontario and 15km from the Trans Canada highway. Bissett Creek is a large flake, high purity, scalable deposit that is located close to major roads, a natural gas pipeline and other infrastructure and will have very competitive operating costs. The Company has completed an NI 43-101 bankable final feasibility study and the major environmental approval required to start construction has been received. A number of other permits relating to air, noise, water, species at risk, etc. are required prior to the commencement of production and will now follow in the normal course. Northern anticipates that it will be in a position to begin construction of the mine in 2014, and be in production in 2015, subject to the availability of financing.
Graphite prices increased substantially from 2005 to 2012 due to the ongoing industrialization of China, India 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. For example, it takes 30 to 40 times more graphite than lithium to manufacture lithium-ion batteries. The use of li-ion batteries is growing rapidly in consumer electronics, they are now becoming popular in power tools and motor scooters, and growth will continue with the increased use of hybrid and all electric automobiles. Whole 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.
China produces 70% of the world’s graphite and is seeing production and export growth leveling off, costs increasing and quality declining. As a result, export taxes and a licensing system have been instituted and strict environmental and operational regulations have been imposed for both existing and new graphite mines. Graphite and the rare earth elements now share the same "security of supply" issues and for these reasons, the European Union and the USA have both named graphite a supply critical mineral.
With limited worldwide exploration and few potential development projects on the horizon, the Company is well positioned to benefit from the continued improvement in graphite demand and prices.