The graphite industry in North America has undergone tremendous changes in the last 100 years. Early in the 20th century, there were producing mines in the U.S., yet today there are none. In fact, there is only one operating graphite mine in all of North America currently, Imerys Carbon and Graphite’s mine northwest of Montreal, Canada. For years now, China has dominated global graphite production. Due to a confluence of factors, including President Trump’s aggressive stance on imports and the multitude of uses for graphite, North American demand should see a significant uptick shortly, which will bode well for up-and-coming graphite miners like Lomiko Metals Inc. (TSX-V: LMR) (OTCQB: LMRMF).
Lomiko is a diversified miner with ownership and rights to not only metal properties in Canada, but also ownership and investments in companies focused on graphite/graphene technologies. Lomiko’s properties include the Vines Lake Zinc-Silver-Gold Property in the Cassiar Gold District in British Columbia, the Quatre Milles graphite property in Sainte-Veronique, Quebec (northwest of Montreal) and the La Loutre Flake Graphite Property also northwest of Montreal.
The company is positioning itself to capitalize on a market that, according to Future Market Insights, had global graphite sales valued at $14.69 billion in 2016. FMI further forecasts robust growth at an 11.1% compound annual growgth from 2016 through 2026. Lending additional credence to the market potential, Statista data shows graphite demand to grow from 562,000 metric tons in 2016 to 684,000 metric tons in 2020, an increase of 21.7%.
“These are exciting times,” A. Paul Gill, CEO of Lomiko, told Equities.com of Lomiko, told Equities.com in November. “We have insight into the future and have positioned ourselves accordingly. The path for us is clear. We know where major investors will be in the next year. Lomiko has analyzed changes in consumer trends and concluded that consumer interest in Electric Vehicles will continue to grow for the next 20 years until these vehicles make up 25% of the cars on the road. Each of these vehicles requires anywhere between 100 and 300 lbs of graphite in the lithium batteries used in EVs. One of the key insights we made was that each car will need 15 times more graphite than lithium. With demand for lithium spiking to all time highs, Electric Vehicle manufacturers are tying up the supply in lithium. In order to meet graphite demands for the Tesla (TSLA) cars alone, 4-5 new flake graphite mines need to start producing natural flake graphite to meet this new demand.”
La Loutre is a large project, consisting of one contiguous block of 42 mineral claims enveloping 2,867 hectares (~29 square kilometers) about 53 kilometers east of the Imersys Cabon and Graphite mine. Through an agreement with Canada Strategic Metals (CJC:CA)(CJCFF), Lomiko has an option to purchase 100% ownership of the property.
On February 15, Lomiko released the latest drill results from La Loutre showing high grade graphite intercepts as part of a 10-hole, 1,550-meter drill program completed in December in the Refractory zone at the project. Highlights of the results included Hole LL-16-06 returning values of 7.67% flake graphite (Cg) over 85 meters, including 13.09% graphite over 31.5 meters.
The data from infill drilling, which is meant to confirm mineralization between step-out drill holes, included in the latest press release dovetailed with additional data disclosed in January. Graphite intersects to data have shown promising lengths along the core mineralization up to 135.6 meters and grades as high as 17.08% graphite. Further drilling is required to better define the true width of mineralization.
To date, drilling indicates that the mineralization is 200 meters wide at a current strike length of 400 meters trending in a northwest to southeast direction. Importantly, the strike remains open in both directions.
Graphite, which is converted into graphene, is part and parcel to our lives due to its nearly unprecedented physical and chemical properties. Graphene is 200x stronger than steel, yet flexible. It’s extremely thin; in fact, it’s called the world’s first 2D material. Moreover, it’s 1000x more conductive than copper. Graphite and graphene are critical in countless products, including lubricants, steel manufacturing, anti-corrosive paints, solar cells, chemical processes, photonic circuits and, as has become very high profile in recent year, lithium-ion batteries.
The increase in production of electric cars is considered a primary driver of graphite demand going forward, especially high-grade graphite, such as what is being discovered by Lomiko. With graphite production shortfalls expected as early as next year, it won’t be just graphite demand that’s on the rise, it will be well-positioned miners too.
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