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Graphite One (TSXV: GPH; US-OTC: GPHOF) says results from its summer drilling program have returned high-grade graphite mineralization at its Graphite Creek project in western Alaska and will help it speed up the completion of a feasibility study later this year.
The results from about 8,730 metres across 52 drill holes were part of Graphite One’s largest exploration program in the company’s history at the project.
Highlighted results include 9.4 metres grading 13.87% graphitic carbon (Cg) from 10.3 metres depth in hole 23GC110; 6.5 metres at 19.02% Cg from 47.4 metres and 10.1 metres grading 12.3% from 61.6 metres in hole 23GC127; and 11.9 metres at 7.07% Cg from 53 metres in hole 23GC115.
The results demonstrate exceptional consistency of a near-surface, high-grade graphite deposit that remains open to the east, west and down dip of the resource estimate, the company said.
“We see these results as another indication that Graphite Creek is a truly generational strategic resource for a world hungry for graphite, and we continue to strengthen our position to deliver a feasibility study in late 2024,” Graphite One CEO Anthony Huston said in a news release.
Despite being highly-sought as a key ingredient in electric vehicle batteries, there are only a handful of graphite exploration projects in North America, and only one producing mine – Northern Graphite’s (TSXV: NGC; US-OTC: NGPHF) Lac des Iles site in Quebec. Graphite took on added geopolitical significance after China in November announced stricter export controls over the material. The East Asian country is the world’s top graphite producer and exporter and refines more than 90% of the material.
In a research note on Tuesday, Red Cloud Securities mining analyst David Talbot said the latest results bode well for Graphite One’s feasibility study and build on the 2022 prefeasibility study. It outlined a mine with a 23-year life and a planned manufacturing plant in Washington state with a 26-year operating life. It has an initial capex of $1.1 billion, operating expenses of $3,590 per tonne and an after-tax net present value (at 8% discount) of $1.3 billion and an internal rate of return of 22%.
“We look forward to seeing additional improvements to the size and economics of the Graphite Creek project, which already hosts the largest known flake graphite resource in the USA,” Talbot said.
He also noted that only about 10% of the mineralized trend at Graphite Creek, located in the Kigluaik Mountains, about 60 km north of Nome, Alaska, has been drilled so far.
The site hosts 32.5 million measured and indicated tonnes grading 5.25% Cg for 1.7 million tonnes, and 254.7 million inferred tonnes at 5.11% Cg for 13 million tonnes. The estimate used a cutoff grade of 2% Cg.
The Vancouver-based company’s work on a feasibility was boosted last July with a $37.5-million grant from the U.S. Department of Defense, funded through the Inflation Reduction Act.
The U.S. Geological Survey almost one year ago confirmed Graphite Creek as containing the country’s largest known graphite resource and among the largest in the world. Shares in Graphite One were up 1.3% to 79¢ apiece on Tuesday at mid-day in Toronto, valuing the company at C$103.1 million. Its shares traded in a 52-week range of C76¢ and C$1.97.
