Vancouver-based Big North Graphite (
TSX:V.NRT,
Stock Forum) has announced they have entered into a letter of intent to acquire all shares in Grafito de Mexico from MAG Exploration Services, bringing them ownership of the El Tejon flake graphite mine and mill.
A 500 hectare property that includes a past producing mine, working mill and near complete mine infrastructure, located 38 kilometers from Oaxaca, El Tejon is the only flake graphite mine to have produced in Mexico, according to the company.
“The mine and mill were originally built in 1980 by the Government of Mexico. In 1989, a second processing line was installed to increase the capacity to approximately 4400 tonnes per year of finished graphite. El Tejon was an open pit mine, and the mill was used to crush, mill, float, dry, screen and pack final product.”
The project was subsequently privatized before shutting down in 2002 due to fluctuating graphite prices.
Big North says the mine produces around 20% large flake graphite and 80% medium and fine flake, which will complement their existing amorphous graphite projects in Sonora State and, with an abundant local work force, it will require a low cap ex to get the mine producing once more.
“Company President
Spiro Kletas commented, "We are very excited to add this project to Big North's portfolio of graphite assets. Our strategy has been to be among the first to be able to supply graphite to the market. Not only does the El Tejon Property represent near term production potential, but also the ability for the Company to fast track our entry into the flake graphite market.”
“Further,” he added, “the Company believes that there is significant expansion potential for the mine and mill."
Big North will be paying US$1,700,000, a 3% net profits interest royalty and issuing 12,500,000 common shares to MAG, staggered over 60 months, in return for the mine with only $250,000 due over the first twelve months.
V.NRT has acquired three past producing amorphous graphite mines in Sonora, Mexico and is working towards accelerating the restart of the Nuevo San Pedro amorphous graphite mine while test mining at Nuevo San Pedro and holding large flake exploration projects in Ontario and Quebec.
The company is currently assembling a crushing, screening, sizing and drying plant in Mexico, and is buying unprocessed graphite from local miners to sell to the US market to generate early revenue.
FULL DISCLOSURE: Big North Graphite is a Stockhouse Publishing client, but has not paid for this article.