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Northern Graphite Corp V.NGC

Alternate Symbol(s):  NGPHF

Northern Graphite Corporation is a Canada-based flake graphite producing company. The Company is focused on producing natural graphite and upgrading it into high-value products critical to the green economy, including anode material for lithium-ion batteries/electric vehicles (EVs), fuel cells and graphene, as well as advanced industrial technologies. Its mining operations include Lac des Iles, Okanjande and Bissett Creek. Its products include Flake Graphite Products and Porocarb Products. The Lac des Iles (LDI) mine is the only flake graphite producer in North America. The LDI mine is located approximately two kilometers south of Lac-des-Iles, Quebec, 110 kilometers (km) northeast of Ottawa and 180 km northwest of Montreal. The Okanjande mining is located in Namibia, one of Africa's finest mining jurisdictions. It holds a 100% interest in the Bissett Creek Project, which is located around 15 km from the Trans-Canada Highway between the towns of Deep River and Mattawa, Ontario.


TSXV:NGC - Post by User

Bullboard Posts
Post by scissors14on Jan 18, 2012 7:59pm
392 Views
Post# 19419687

Northern Graphite - The Commodity Supercycle

Northern Graphite - The Commodity Supercycle

Energy, Agriculture, Metals All Drifting Higher

The Commodity Supercycle

By
Tuesday, January 17th, 2012

I told you a few weeks ago you'd be hearing more about my recent trip to a graphite mine in the Ontario wilderness...

Many things I saw and learned on that trip are worthy of passing along.

Today I'd like to focus on the conversation I had with the CEO of the company I went to visit during our three-hour ride to the mine from Ottawa.

The Commodity Supercycle

“We've all seen what the commodity supercycle has done to copper, gold, and many other resources,” he said as we pulled out of the hotel parking lot.

“Copper traded between
.50 and $1.00 per pound for decades. And then, because of the commodity supercycle, it went over $4.00. Same with gold... It used to sell for between $250 and $500 per ounce. Now it's $1,600 per ounce.”

That isn't inflation.

That's the commodity supercycle.

Many things have caused this change, the big one being China, with India soon to follow.

And in the mining industry, the deposits we've lived off for years have been the big low-cost, easy-to-find mines just like with oil.

But those mines are all getting deeper and older, so costs are increasing.

Engineering and environmental standards have gone up and there's been capital and cost inflation.

So gold can't go back to $400 per ounce... and copper can't go back to $1.00 per pound.

Next in Line

Graphite has been one of the last minerals to respond to this commodity supercycle. And the reason for that is there was excess production capacity from China.

From 1990 until 2005, graphite prices were in the tank.

Gradually, the growth in automobile and steel demand began to eat up that spare capacity, and prices began to rise. They grew steadily through 2008. Then something else happened...

China got tired of selling the world cheap graphite.

They control 70% of the market, and just as they did with rare earths, they started imposing export duties and value-added taxes to manipulate the market.

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Currently, China is adding a 20% export duty and a 17% value-added tax to graphite produced there.

And, just like with rare earths, graphite prices have started to soar:

Graphite Prices

They're up more than 120% in the past few years.

But valuations of companies and deposits were slow to catch up.

When the company I went to see got going in 2008, it only had a market cap of $2 million — and it's potentially the largest graphite mine in the world.

It's since grown to about $40 million...

But with hundreds of millions if not billions of dollars worth of graphite in the ground, it certainly won't stop there.

I can't wait to tell you more about it.

Rising Tide

I'm sure you've taken notice of the “commodity supercycle,” even if you didn't know what it was called.

Copper, nickel, gold, wheat, corn and, of course, oil will never again see the prices of the nineties and early oughts.

I break these commodities down into three categories: energy, agriculture, metals. Some may split metals into two categories: precious and industrial.

We've been showing you how to profit from the energy side via oil and natural gas producers. Last week, I showed you how to buy energy and agricultural commodities directly.

To help get you up to speed and profit from the metals side, I've been researching and taking as many hands-on trips as possible.

I firmly believe physical materials will be one of the best ways to grow your wealth over the next few years.

 

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Call it like you see it,

Nick Hodge Signature

Nick Hodge

follow basic@nickchodge on Twitter

Nick is an editor of Energy & Capital and the Investment Director of the thousands-strong stock advisory, Alternative Energy Speculator. Co-author of the best-selling book Investing in Renewable Energy: Making Money on Green Chip Stocks, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

 

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