Philip Ker In The Gold Report On NGChttps://www.theaureport.com/pub/na/13998
PK:Northern Graphite Corporation (NGC:TSX.V; NGPHF:OTCQX) recently put out a bankable feasibility study and the market had mixed reactions. This was due to slightly higher than anticipated capex requirements and any potential dilution that may come into play as it raises capital to start the groundwork at Bissett Creek in Northern Ontario.
TGR: Northern Graphite is looking at possibly selling battery-grade graphite at a substantial premium to concentrate. The economics of that idea were not included in the recent feasibility study. Have you developed any models on how that could change the economics of Bissett Creek?
PK: My target actually includes the production of battery-grade graphite. I changed my model and increased my target substantially when Northern Graphite confirmed that spherical high purity graphite could be made from its large flake deposit. Currently, the company is investigating what parameters and infrastructure would be needed for upgrading a recovered flake concentrate to high-purity battery-grade material. Management is indicating that it would need approximately $10M in addition to the current capex requirements for the required processing facilities. An engineering study into the upgrading scenario is under way and we can expect the results of that later this year. Adding this circuit provides a substantial premium for spherical graphite of approximately $5,000/ton.
TGR: Right now, the company has about 60M shares outstanding. Considering those new capex requirements, how high do you think that float could go?
PK: It all comes down to an offtake agreement. I know management is keen on having some skin in the game from an offtake suitor. I believe the company will be working diligently on this over the next few months to solidify its financing options.