Focus shifts to local graphite demand

Top image :
Lac Knife camp on the edge of Lac (Lake) Knife in north-eastern Quebec, Canada

Focus Graphite has updated the Lac Knife graphite project feasibility study nearly a decade after the first FS put a circa-C$166 million upfront cost on a 25-year mine producing 44,300 tonnes of concentrate a year. Now the capital cost for the proposed Quebec venture is looking more like C$236m for similar output.

TSX-listed Focus, which has a sub-C$30m current market cap, maintains interest in developing a secure, North American source of high-purity large-flake graphite is on the rise.

“North American and European electric vehicle [EV] markets are set to expand significantly over the next two decades in an effort to get road emissions to carbon neutrality by 2050 and as governments enact industrial policies aimed at domestic development of EV supply chains.

“New EVs will be powered by batteries that require significant amounts of high-quality graphite.”

When Golder Associates signed off on the 2014 Lac Knife FS, an independent market study indicated flake graphite concentrate prices at a four-year low were probably “the bottom of the market”.

“The primary end-market for flake graphite is the refractory, foundries and crucible sector,” the FS report said. “However, the lithium-ion battery sector is the main emerging market for flake graphite.

“With only small quantities of spherical graphite required in many lithium-ion batteries, greater capacity batteries, such as the ones required for electric vehicles, will drive demand from this sector over the coming years.”

Focus had signed an offtake deal late in 2013 with a Chinese entity for at least half Lac Knife’s proposed output.

Market and geopolitical winds have since shifted.

Focus says the project “is designed” to produce graphite concentrates “mainly for the North American and European battery anode materials industry”.

“The updated project feasibility study positions Focus to become a leading supplier of these graphite concentrates to EV battery manufacturers,” the company says.

The new FS prepared by DRA Global outlines base case production of 47,781tpa of flake graphite concentrate, with an average mill feed rate of about 365,000tpa, for 27 years. It uses a relevant average 2022 price for graphite concentrate of US$1679/t to come up with an economically viable base case scenario and 2.8-yea capital payback.

“This feasibility study update marks a new significant milestone in the development of the Lac Knife project,” Focus CEO Marc Roy said.

“It confirms that the project hosts a graphite deposit with an average graphitic carbon grade of 99.7% in plus-80 mesh flake concentrate, which is exceptional in this industry.

“With the FSU in hand, Focus is ready to take the next step, which is to complete the environmental and social impact assessment study for Lac Knife and then move the project through the Quebec Government environmental review and public consultation process towards mine permitting.”


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