Thursday 27th October 2016

Resource Clips

New stock on the block

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Forbes & Manhattan hold 20 million of Mason’s 56.9 million outstanding shares. An advantage to the relationship with the merchant bankers “is you can tap into highly skilled resources,” explains Gascon. “So we have a pool of technicians, engineers, geologists, but also back office, legal, compliance people who can support the operation as we move forward.”

The project lies some 300 kilometres from the St. Lawrence deep-water port of Baie-Comeau and has year-round road access.

I visited many graphite mines that operated or still operate during my 20 years. This one is unique for that level of grade.—Mason Graphite CEO Benoit Gascon

Should Mason meet its targets, Lac Guéret will join Canada’s most advanced graphite projects, which include those of Flinders Resources TSXV:FDR, Northern Graphite TSXV:NGC, Energizer Resources TSX:EGZ and Focus.

On October 29 Focus released a preliminary economic assessment for its Lac Knife Graphite Project in northeastern Quebec. The report projects a $154-million capex for an open pit with a $246-million pre-tax NPV at a 10% discount rate and a 32% pre-tax IRR. Pre-tax payback comes to 2.8 years.

The PEA reassessed a January resource estimate, converting its measured category to indicated. As a result, the project’s resource now shows 4.94 million tonnes grading 15.76% carbon indicated and 3 million tonnes grading 15.58% C inferred. Based on that resource, the PEA sees annual production of 300,000 tonnes. Over a 20-year lifespan, that comes to 6 million tonnes with an average grade of 15.66% C.

The study considered expressions of interest that Focus received from potential consumers on three continents which, the scoping study states, support a maximum annual forecast of

  • battery-grade production of 16,900 tonnes grading over 99.95% C with flake sizes of +100 mesh
  • medium-grade production of 11,200 tonnes grading over 90% with flake sizes of -100 mesh to +200 mesh
  • fine-grade production of 15,500 tonnes grading over 80% with flake sizes of -200 mesh.

The PEA was originally scheduled for release on June 7. Last September the Ontario Securities Commission imposed a management cease trade order following review of a company disclosure not supported by a compliant technical report. The OSC set an October 31 deadline for the PEA.

In a statement accompanying the October 29 announcement, president/CEO Gary Economo said, “Lac Knife is a world-class resource and the publication of our preliminary economic assessment confirms Focus has the potential to become one of the highest-grade, lowest-cost producers of graphite in the world. We enter a new phase now, where we can expedite our financing, advance customer off-take agreements and [construct] our purification and anode facilities.”

Focus shares closed October 26 at $0.70, opened October 29 at $0.76 and closed the day at $0.72. The shares opened and closed October 30 at $0.74 and $0.69.

Read more about Focus Graphite here and here.

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