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Graphite plays - another possible bubble?

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Graphite plays - another R.E type(hype) bubble?

 

Been following a few of the Graphite plays for a couple of years now. The China story caught my attention, limited supply, insatiable demand etc.

 

Reckoned it might turn last year as in brief the story was hyped up like many other resource themes and then sector was equally trashed, yep like many other resource stories. But I took a little more notice when production cutbacks out of China seemingly were encouraging near term producers of better times ahead.

 

So hunting round found this article, which is a pretty lengthy but reasonable starting point about what Graphite and it's mining is all about, even with some thought as to what makes a successful play.

 

Worth a read http://graphiteinvesting.com/ with all sorts of useful refwerences, including links to other articles.

 

For that reason i thought I'd post a thread and maybe i'll add a few more links.

 

Anyone interested in Graphite?

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Graphite outlook 2014

 

This article focuses on as the China market tightens, winners will be those companies who tailor make for market, such as demand for batteries and those first to sign off take agreements. Seems that a race into production is the key performance driver.

 

http://www.theaureport.com/pub/na/15798

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Looking at a second bubble? Slightly older aticle by Dave Skarica mentions Northern Graphite(NGC:TSX.V) and Mason(LLG:TSXX.V) which I origianlly followed amongst others.

 

http://www.resourceinvestor.com/2013/01/16/graphite-stock-strategies-for-a-second-bubble-davi?t=critical-material&page=2

 

Northern have a good website, although as Dave points out were the trailblazers, since that spike they have flatlined recently near lows.

 

Mason http://www.masongraphite.com/ have had a better time of late on their prospect updates, funding and some guy called Rogers gave them a bit of publibity ;)

 

For potential investor reward of finding a good un, just take a look at the share price performance since these became funded and started drilling; above doubled off lows a few months back at one point.

 

See webpage and charts of Graphite One here http://graphiteoneresources.com/investors/stock_quote/

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Just looking around for brief articles to demonstrate a change in outlook for graphite and a few more companies named.

 

http://graphiteinvestingnews.com/4876-graphite-outlook-2014-to/

 

 

 

At the moment, the main factor with the potential to move graphite prices is the fact that as many as 55 graphite miners and processors in the Chinese town of Pingdu have been ordered to stop producing flake graphite on environmental grounds.

Announced midway through December, the stoppage is expected to remain in place until June 2014, “or until the companies can prove an acceptable standard of environmental controls,”..........

 

Perhaps as the article indicates, the most significant company driver was the Focus Graphite off-take agreement with China; mainly because it shows their internal demand warrants investment outside China, which fuels global demand outlooks and no doubt prospects of acquisitive action/rumours.

 

See http://www.focusgraphite.com/ also the spike in s.p around the news.

 

 

 

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Two more that interest me.

 

 

Alabama Graphite http://alabamagraphite.com/ current s.p CSE/ALP Cn$ 0.165

 

 

Near-Term Graphite Producers the Only Way to Play the Sector

It’s understandable why investors are excited about the graphite space, as demand growth is expected to be quite robust. For example, according to Industrial Minerals Data, about ~25% of the graphite market is in Batteries & Storage, and that segment is growing at 20%+ per year. Therefore, the select few graphite juniors that reach production first will capture a leading and defensible position in the industry. This is especially true in the U.S. and Canada, where there’s currently no graphite production at all.

 

Read and view the ramp if interested as featured here

http://www.au-wire.com/first-graphite-juniors-into-production-will-win-alabama-graphite-a-winner/

 

 

Real near term with plenty of upside space is

 

 

Stratmin Global Resources http://www.stratminglobal.com/ current s.p AIM/STGR 12.00p

 

Downside here is AIM and some may wince at the involvement of Darwin. However, it's mining in Graphite friendly Madagascar, has license approval and is about to produce; one eye open to many vagaries in the story and unfulfilled past promise, maybe it's about to turn?

 

Link to Proactive features and videos http://www.proactiveinvestors.co.uk/companies/stocktube/2426/stratmin-looks-forward-to-exciting-2014-with-increased-shipments--2426.html

 

Disclosure : Bought the former recent, the latter I've traded and currently hold a sizeable position, so no bias at all :rolleyes::lol:

 

Mentioned STGR here http://www.greenenergyinvestors.com/index.php?showtopic=18668

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Two more that interest me.

 

 

Alabama Graphite http://alabamagraphite.com/ current s.p CSE/ALP Cn$ 0.165

 

Real near term with plenty of upside space is

 

Stratmin Global Resources http://www.stratminglobal.com/ current s.p AIM/STGR 12.00p

 

Downside here is AIM and some may wince at the involvement of Darwin. However, it's mining in Graphite friendly Madagascar, has license approval and is about to produce; one eye open to many vagaries in the story and unfulfilled past promise, maybe it's about to turn?

 

Disclosure : Bought the former recent, the latter I've traded and currently hold a sizeable position, so no bias at all :rolleyes::lol:

 

 

Just a little update to my self interest, Alabama(v.ALP)has powered away and released further sampling news today, now stands at Cn$0.27c

 

STGR treading water slightly below my little plug, hmm those Darwin boys...food for thought.

 

Mason(v.LLP) mentioned earlier has slipped back today after treading water this past month, tempted to dip in again on any weakness as below recent warrant price now.

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Tesla Gigafactory Seeks North American Raw Materials To Cut Pollution

 

 

Tesla Motorsicon1.png [NSDQ:TSLA] has announced it will source raw battery materials from North America only, when it opens its $5 billion battery gigafactory....... Tesla's gigafactory, expected to double worldwide output of lithium-ion batteries when it opens, could leave a vast pollution footprint behind it--the result of lithium, cobalt, graphite and other materials converging from global locations.....

 

So where could Tesla get the materials it seeks?......

 

....Graphite could be more difficult--another five or six graphite mines are needed to meet the demand that Tesla's factory would cause, though U.S. regulation means production would be far cleaner than that of China--and that's before you get to the benefits of reducing transportation distances.

 

 

http://www.greencarreports.com/news/1091577_tesla-gigafactory-seeks-north-american-raw-materials-to-cut-pollution

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Tesla's new $5bn ‘gigafactory’ could spur 37% graphite market growth(see story)

 

Notes the following companies..."There are several new graphite-mining projects in development in the medium term, among which are the 20 000 t/y large-flake, high-purity Bissett Creek graphite project, in Ontario; private project developer Ontario Graphite’s Kearney large-flake, high-carbon graphite mine, also in Ontario; Energizer Resources’ Molo graphite project, which is being developed as part of the Green Giant graphite project in Madagascar; and Focus Graphite’s high-grade Lac Knife graphite resource, located 27 km south-west of Fermont, Quebec."

 

 

http://www.miningweekly.com/article/teslas-new-5bn-li-ion-gigafactory-could-spur-37-graphite-market-growth-2014-03-12

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Little update on some of the plays. Mason have recently lined up the money men being some way from production. Focus confirmed fairly recently up to 200,000 tonnes over 10 years as part of their off take deal. Stratmin ditched Darwin and cited improved purity on initial production tests, this one looks like it's got to prove it's quality having under delivered on promises and productuion previously - it does look poised for later in the year as somewhat significantly undervalued, IF they do what they plan/say they can?

 

Elsewhere plenty of stories about China cutting the number of mines operating, reducing the number of producers, improving sector governance which all alludes to supply constraints and improving pricing for any would be producers. Just a flavour.

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Graphite looks interesting, and I keep an open mind for anything that could be in a bull market.

 

After a 5 minute search, there is one company called Northern Graphite that could be a play on this sector.

 

https://www.google.com/finance?q=CVE:NGC

 

Market cap $38m.

 

The stock price is under $1, but it did rise to $3 in 2012.

 

It even has a page on the graphite price (but I don't think it is live) here http://northerngraphite.com/graphite-labs/graphite-price/

 

Price-chart-Feb-13-2014.jpg

 

Note that when the graphite price rose, so did this stock price - a good sign!

 

However infomine.com does not have a live graphite price, which is unfortunate, I always would like to have access to this kind of information.

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Graphite looks interesting, and I keep an open mind for anything that could be in a bull market.

 

After a 5 minute search, there is one company called Northern Graphite that could be a play on this sector.

 

https://www.google.com/finance?q=CVE:NGC

 

Market cap $38m.

 

The stock price is under $1, but it did rise to $3 in 2012.

 

Yes mentioned these on post 3. Their latest presentation April 2014 http://northerngraphite.com/wp-content/uploads/2014/04/NGC-April-2014-PPT.pdf (taken from website)

 

Another to flag up with the latest presentation is Graphite One GPH:TSX-V (see page 17 for some peer group comparison inc NGC)

 

http://www.graphiteoneresources.com/investors/presentations/

 

Current $0.195c

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Lomiko TSX-V:LMR is another that spiked the turn of the year(possibly on a tip since they were forced to issue a not aware blah,blah N.R)

 

See their website http://www.lomiko.com/corporate.html with a link to the latest corporate presentation PDF April 2014 http://www.lomiko.com/public/files/others/LOMIKO_APRIL_15_2014_(1).pdf

 

All very interesting, but other than trial results and fundraising completed, yet another blue sky but some distance away would be producer.

 

Current price $0.065

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Link to Stratmin interview with Proactive 24.04.14

 

 

Disclosure: Hold and accumulating ;)

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For me Syrah resources (ASX:SYR) are still a little too vague in the detail, but nonetheless worth noting their recent off-take with Chalieco, the term agreement in their case lacks detail, but see for comparitive purposes.

 

http://www.syrahresources.com.au/site/DefaultSite/filesystem/documents/ASX%20Announcements/MOU%20for%20Offtake%20Agreement%20Signed%20with%20Asmet%20(UK)%20Limited.pdf

 

See effect again on share price, though not as substancial as others http://www.syrahresources.com.au/InvestorRelations/SharePriceHistory.aspx

 

Information taken straight from website

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Update: Focus Graphite's Partner Grafoid Finalizes Its Acquisition Of Alcereco

 

Oct. 10, 2014 1:57 AM ET | About: Focus Graphite, Inc. (FCSMF) by: Ben Kramer-Miller

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article. (More...)

Summary
  • Grafoid, of which Focus Graphite owns just under 20%, just finalized its C$1.2 million acquisition of ALCERECO in an all-stock deal.
  • I had not anticipated this in my recent article.
  • The deal values Grafoid at $5/share, and if this is accurate, then Focus' stake is worth C$39 million, which is incredibly bullish.
  • Of the late-stage Canadian graphite companies, I continue to believe Focus is the best positioned, and its potential liquidity related to its Grafoid holdings reinforces this conviction.

Focus Graphite (OTCQX:FCSMF) recently announced that its graphene research partner - Grafoid - completed its acquisition of ALCERECO, which is a company that Grafoid believes can help it bring its trademarked MesoGraf product to the market. The deal is valued at C$1.2 million, and is an all-stock deal that values Grafoid shares at C$5 each.

 

Perhaps the most compelling aspect of this deal is the fact that it reveals just how valuable Grafoid is, and for Focus Graphite shareholders, how valuable its nearly 20% position is. Focus Graphite owns 7.8 million shares of Grafoid. At C$5/share, they are worth C$39 million, which is just C$9 million less than the company's current market capitalization. Now perhaps this is an over exaggeration. After all, if Focus tried to divest all of its position, it likely would not receive C$5/share. Nevertheless, the point is that Focus Graphite has tremendous hidden value in its Grafoid holdings.

 

I briefly mention this in my recent article on the company, in which I quote COO/President Don Baxter saying that the company could divest shares of Grafoid in order to raise capital to construct its flagship Lac Knife Graphite Project. The recent ALCERECO acquisition demonstrates that this could be a serious source of capital for the company even if it can't get C$5/share.

 

With that in mind, and considering the recent share price weakness I remain bullish, and continue to see enormous upside - as I calculated in July.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks

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Article about Australian listed graphite companies.

Best to check out the competition.

http://www.mining.com/web/inside-australias-graphite-boom/?utm_source=digest-en-mining-141013&utm_medium=email&utm_campaign=digest

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Article about Australian listed graphite companies.

Best to check out the competition.

Agree, posted this elsewhere, my get out of jail card came last week with I think 9.84p peak, 80% surge on RNS a day.

 

StratMin (AIM: STGR), the graphite production and exploration company with assets in Madagascar, announces it has entered into an Offtake Agreement with one of the world's largest independent processors and merchants of graphite (the "Buyer") to sell its natural flake graphite product to the Buyer with effect from 20th October 2014 (the 'Agreement').

 

Currently 8.24mid today, on profit takers no doubt wary of the lack of detail.

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