Lomiko Metals Inc. (TSXV: LMR, OTCQB: LMRMF) is exploring for lithium and graphite in Quebec and it’s 100% owned subsidiary Lomiko Technologies has investments in Graphene 3D Lab, a publicly traded graphene stock (TSXV: GGG and OTC: GPHBF), is a 40% holder of private companies Graphene Energy Storage Devices and 11% shareholder of Smart Home Devices.
Lomiko Metals is focused on the exploration and development of minerals for the new green economy such as lithium and graphite. Graphite, specifically high purity crystal flake, is in high demand because of its use in lithium-ion batteries. Global demand will outstrip supply by 2018. There happens to be 15x the amount of graphite in a lithium battery than actual lithium and the substance cannot be substituted. Overall, 70% of the price of a lithium battery is raw materials and natural graphite is cheaper than synthetic versions
Yesterday, Lomiko Metals moved to the OTCQB and currently trades under the symbol LMRMF. In Germany, the WKN number is A2DJKB and the symbol is DH8C. These are all good signs that Lomiko is ready to attract new investors.
However, it was results from drilling in November, 2016 that has shaken-up the graphite industry pecking order. Companies such as Mason Graphite TSXV: LLG, Northern Graphite TSXV: and ZenyattaTSXV: ZEN have long been recognized as leaders in the space. However, with a drill hole indicating there is a deep, rich graphite area on it’s La Loutre Property, Lomiko has been quickly propelled to a top 5 project.
Supply and Demand
Natural graphite has many uses from pencil lead to brake shoes, batteries, lubricants and in steel-making. However, it is the larger flakes – above 80 microns in size and above 94% carbon content that fetch the highest prices. If the carbon content increases, so does the price per tonne. Of course, high end uses such as nuclear reactors, military and batteries demand the best possible combination of flake size and price. The reality is that demand is going up and therefore, prices for battery grade flake graphite material will be going up.
In 2015, a leading analyst in the field named Simon Moores of Benchmark Minerals indicated that the Tesla (NASDAQ: TSLA) giga factory built in Nevada would require at 126,000 more tonnes of flake graphite to meet the demand for li-ion batteries from that one plant alone. A typical graphite mine is able to produce 25,000 tonnes of graphite per year. That’s 5 new mines required to meet only Tesla’s needs. As of 2016, Volkswagen, and BMW have joined Tesla, Nissan and Chevy in introducing Electric Vehicles. It is anticipated the demand or graphite will be cause prices to rise much higher.
The Rise of Electronic Vehicles
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 their lithium batteries. 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 cars alone, 4-5 new flake graphite mines need to start producing natural flake graphite to meet this new demand.
Quebec is the location of strong mineral developments including the Grenville trend where many Flake Graphite properties can be found, including the Imerys Mine. In addition, it is one of the most stable mining jurisdictions in the world and has been in the top ten for the last 20 years.
Having followed the boom in Lithium stocks and now knowing that much more graphite is needed to make Li-ion batteries, it appears that Lomiko is on the right track and at the right spot in a bull market for Electric Vehicles and battery materials.
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