Global Li-Ion Graphite is developing projects in Nevada and Madagascar
Mining can be like real estate. Sometimes "location, location, location" can give a company a crucial edge in getting its goods to market. So, when you're mining graphite, a key component of electric vehicle batteries, you can't get a much better location than right in the Tesla gigafactory's backyard.
That's exactly where Jason Walsh has his Global Li-Ion Graphite Corporation (CSE: LION) parked — just down the road from electric vehicle manufacturer Tesla's 15 million-square-foot battery manufacturing facility in Nevada. His company also has some prime real estate on the other side of the world in Madagascar that's ideally situated to the burgeoning graphite markets of India and China.
So you might say Global Li-Ion has the best of both sides of the world when it comes to strategic locations for producing "the new "Black Gold."
"You can't get much more strategic than our proximity to Tesla," says Walsh, the company's President and Director. "The fact that Tesla is very vocal about sourcing locally bodes well for companies like Global Li-Ion Graphite when you're right in their backyard."
Graphite is similar in composition to coal and diamonds, and has many industrial uses, including as a dry lubricant in the manufacture of steel products. And of course, it's used to make the ubiquitous pencil.
Because it's such an efficient conductor of electricity, graphite is also the major component in a lithium-ion battery, the power-source for Tesla's line of electric vehicles. If your goal is to be a principle supplier of graphite to the rapidly growing energy storage and lithium-ion battery industries, it doesn't hurt to have a project near Carson City, Nevada, just a short drive from the Tesla gigafactory.
That’s precisely where Global Li-Ion’s Chedic Graphite project is located. Comprised of 50 lode claims for a total of 1,000 acres, the site has been active since the 1920s when Walter Chedic produced graphite from an open pit mine. At that time, the mine’s main purpose was pencil production. The Chedic graphite-enriched structure has the potential to contain over one million tons of graphite mineralization, with grades up to 22% carbon content. Global Li-Ion has engaged GeoXplor, the prominent operators in Nevada, to secure permits, and conduct confirmation and exploration drilling, and recognisance program. Walsh says that data mining is essential to mineral mining and exploration in the United States, and GeoXplor are very good at it.
"In the United States, data isn't filed, so it's all about data mining," he says. "When you have access to data and access to historical workings, that's where you are able to generate projects."
The property's past-producing history, and the fact that Nevada is a mining-friendly state, has Walsh optimistic that the project will be in production in short order. He's also buoyed by the recent acquisition of the available historic data on the Madagascar mines, and has engaged Wardell Armstrong to complete a detailed NI 43-101 report.
In addition to the Tesla operation, two other gigafactories are being planned for Nevada, offering Global Li-Ion more potential customers.
Another factor in the company's favour is the soaring price of graphite. Increasing demand has driven the price of graphite — especially better-quality varieties — higher in recent months. It's expected to continue to rise because China's graphite production has shrunk dramatically in the wake of the Chinese government's campaign to enforce stricter environmental and safety standards for industry.
That means China and other countries are going to need new sources of imported graphite. Walsh says Global Li-Ion is in a good position to supply China's needs and that of neighbouring India from its newly-acquired properties in Madagascar. Global Li-Ion is currently in the process of acquiring three mining exploitation licenses from Avana Resources Ltd..
The licenses total 4,375 hectares near Andasibe in Madagascar's Toamasina province. And again, location comes into play — the properties are close the main highway and just 200 km from Madagascar’s main seaport of Toamasina. They're also just 20 km southwest of Sheritt’s Ambatovy nickel/cobalt laterite open pit mine.
Graphite has been produced on the licenses for over a century, dating back to 1910. The small, artisanal surface mining operations produced a combined approximately 18,000 tons of graphite oxide between 1998 and 2008. The previous owners retired, but both the project’s land and operating permits have been kept in good standing and are up to date.
Recent reports by Wardell Armstrong state there's “an average run of mine of 12% graphite with first stage onsite flotation producing a 73% concentrate.” Reports indicate the presence of large flake graphite. The large flake presence is important because like its fellow carbon-based mineral diamond, not all graphite is created equal.
"To find graphite with the right kind of product quality specifications is difficult," says Sam Malin, a member of Global Li-Ion's advisory board who has extensive experience in developing Madagascar's natural resources.
"One of the things that we liked about this graphite is that it is a high-carbon content, high-quality flake graphite, and the flakes are large flakes. This has the advantage of lending itself to favorable processing into forms that can be used for batteries, fuel cells, and even nanotechnology."
Malin, who founded Avana Resources, says while unsorted graphite may sell for between $350 and $800 a ton, high-quality flake graphite refined for use in fuel cells fetches about $15,000 a ton. Graphite that can be used in nanotechnology commands between $35,000 to $40,000 a ton.
Malin says the Global Li-Ion team in Madagascar has experience in dealing with the intricacies of that country's bureaucracy, which was inherited from the French Colonial administration. He says that makes for a few extra hoops to jump through, but the potential rewards are worth it.
"Global Li-ion is focused on mining graphite, so it is location, location, location because we know that the graphite is minable — it's the kind of graphite that we want, and the infrastructure works," Malin says.
"Madagascar is one of the places in the world where all the boxes get ticked."
Walsh says the treasure trove of quality graphite in Andasibe is indicative of Madagascar's amazing wealth of natural resources.
"It's nature's jewelry box. It's very, very rich in everything — gemstones, uranium, coal, gold, nickel, cobalt, and diamonds," he says. "For whatever reason, Mother Nature just deposited an amazing amount of precious everything there."
Walsh speaks from the perspective of a seasoned businessman with over 20 years of experience in financing. His 10 years as a stock broker gave him valuable experience into the formation and financing of venture capital companies. He started his first company when he was just 16.
"I specialize in incubation and listing companies — I’ve listed 40-something companies," says the Vancouver-born Walsh. "I structure the companies, build a team, incubate them, finance them, and then hopefully they grow legs and keep on going."
Walsh was Director and Chairman of THC BioMedical, which went from a $10 million market cap to a $150 million market cap under his leadership. He put together Global Li-Ion using the same model that's brought him success over the past two decades. A well-structured, well financed company with an aggressive acquisition and growth strategy, Global Li-Ion was listed on the Canadian Securities Exchange in July.
And while Walsh is upbeat about having the right team on the ground, and the right properties in the right locations to make his graphite business a success, he's also looking into the future and planning for the next big technological leap in energy storage: graphene.
"Graphene is the biggest game-changer of our lifetime," says Walsh. "Its applications are immense."
Graphene is 200 times stronger than steel, conducts electricity and heat efficiently, and is used in electronics and battery energy technology. Analysts pegged the global graphene market value at $32 million US in 2016, and expect it to reach $193.68 million US by 2022. And it can be synthesized from graphite.
Walsh likens the coming transition from graphite to graphene to the leap from transistors to microchips.
"It's an amazing technology. We're going to have to deal with big changes. You have to change your infrastructure. You basically have to change everything," Walsh said.
One thing that doesn't change, however, is the human element. Malin says good timing and good locations are great, but what makes companies like Global Li-Ion work is building good relationships.
"Relationships are really important, that's something that Jason has worked on very hard," says Malin.
"He's made sure that we have the right relationships to ensure that we can move the graphite we produce. We're not the only graphite producer out there, and we want to make sure we use our relationships to get our graphite where it needs to be."