The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - July 19, 2023
As a first step toward finalizing a feasibility study for an all-American graphite supply chain, Graphite One plans to carry out drilling this year to further expand upon the world-class Graphite Creek deposit near the coast north of Nome, Alaska.
The current Graphite Creek measured and indicated resource lies within a 0.6-mile stretch of a 10-mile trend of graphite that has been identified with drilling, mapping, and geophysics. Click on the image for a larger map.
From the U.S. Department of Defense and policymakers in Washington, DC, to private Alaska companies and the governor of the 49th State, Graphite One Inc. is receiving broad support as it pushes to establish an all-American supply chain that begins in Alaska and ends in the lithium batteries powering electric vehicles, military hardware, and countless electronic products that are no longer tethered to an electrical outlet.
"All of us at Graphite One want to express our thanks for the strong support we've received from public officials whose mission it is to advance Alaska's and America's best interests," Graphite One CEO Anthony Huston said upon a July 17 announcement that the company had been awarded a $37.5 million Defense Department grant.
This substantial funding to accelerate the finalization of a feasibility study for the development of a mine in Alaska and advanced graphite processing and recycling facility in Washington state is partially due to the support from Alaska's Washington delegation and governor, and partially due to the fact that the company's Graphite Creek project hosts America's largest known deposit of the graphite desperately needed for a U.S. economy and military that is transitioning to electrified transportation.
"As the United States and the world transition to an era of dramatically increased mineral use, it is crucial for us to rebuild our domestic supply chains-especially for natural graphite, which we have not produced for more than 30 years and currently depend on China and other nations for the entirety of our supply," said Sen. Lisa Murkowski, R-Alaska. "The Graphite One project is in a league of its own, in terms of the scope of the resource in the ground in Alaska and the vision the company has for manufacturing anode materials and recycling batteries in Washington state."
Alaska-based Taiga Mining Company has long believed in this vision, which is why the private gold mining company is currently the largest Graphite One shareholder and recently loaned the company $5 million to transform the company's vision into reality.
"Graphite One thanks Taiga for its continued support, as the funding will allow the company to continue with delineating the scope and size of our resource," said Huston.
The Pentagon's decision to provide $37.5 million in funds to assist and accelerate Graphite One's efforts to establish a domestic advanced graphite materials supply chain is part of a strategy to reduce America's reliance on competing nations for the battery materials needed to support the Biden administration's goal of having EVs make up half of all vehicles sales in the U.S. by 2030.
This objective and the continued push to 100% EV sales will require enormous quantities of lithium battery materials and rare earths that are almost unnecessary for internal combustion engine vehicles.
To ensure reliable supplies of e-mobility minerals and metals, the White House sent the Pentagon a directive in 2022 to utilize Defense Production Act Title III funding to establish sustainable and responsible domestic production of strategic and critical minerals.
"The United States depends on unreliable foreign sources for many of the strategic and critical materials necessary for the clean energy transition – such as lithium, nickel, cobalt, graphite, and manganese for large-capacity batteries. Demand for such materials is projected to increase exponentially as the world transitions to a clean energy economy," the President penned in the memorandum.
Toward meeting the White House directive, DOD is investing in Graphite One's vertically integrated advanced graphite material supply chain anchored by Graphite Creek, which the U.S. Geological Survey considers to be "the largest known flake graphite resource in the USA" and "among the largest in the world."
"It is great news for our state and our country that the Department of Defense has awarded Graphite One funding under Title III of the Defense Production Act, something I have been working on relentlessly since the project's inception," said Sen. Dan Sullivan, R-Alaska. "Alaska should and could be leading the way in unleashing America's resources. But the rest of the Biden Administration needs to get on board. Hardly a day goes by without the Department of Interior further limiting and undermining Alaska's ability to produce critical natural resources for Alaskans and our nation. This has to stop. Today's DOD announcement is a step in the right direction."
While graphite has not received the same level of media attention as lithium and cobalt, this critical carbon mineral is the single largest ingredient in lithium-ion batteries.
Based on its recent in-depth evaluation of the minerals critical to America's low-carbon energy future, the U.S. Department estimates that by 2035 the annual demand for graphite could be as much as eight times higher than the 1.3 million metric tons mined globally last year.
None of the 2022 supplies of graphite came from mines in the U.S. Instead, America's military and automakers needing this increasingly critical battery mineral get much of their supplies from China – which produced more than 65% of the world's mined graphite and nearly 90% of advanced anode material production during 2022.
This makes Graphite One's Pentagon-backed plan to establish a complete mine-to-battery anode material supply chain in the U.S. strategically important to both the national defense and economic security of the United States.
"This Department of Defense grant underscores our confidence in our strategy to build a 100% U.S.-based advanced graphite supply chain - from mining to refining to recycling," said Huston. "The U.S. simply cannot maintain a 21st century tech-driven economy without critical minerals like graphite."
This funding is also a step toward unlocking Alaska's vast and underutilized critical minerals endowment.
"Thank you to the Department of Defense for recognizing the importance of Alaska's vast mineral wealth, one example being Graphite One," said Alaska Gov. Mike Dunleavy.
"This project will also bring needed jobs and economic development to a rural area of Alaska, with opportunities for hundreds of local hires during construction and operation," added Rep. Mary Peltola, D-Alaska. "I look forward to seeing the completion of the feasibility study for this project, and will continue to support the development of our critical mineral resources."
Graphite One has already outlined more than 14 million metric tons of graphite at Graphite Creek, and this large resource is along a three-mile subsection of a more than 10-mile-trend of graphite that has been traced across the property.
According to a calculation completed in March, Graphite Creek hosts 37.6 million metric tons of measured and indicated resources averaging 5.15% (1.9 million metric tons) graphite; plus 243.7 million metric tons of inferred resource averaging 5.14% (12.3 million metric tons) graphite.
A 2022 prefeasibility study for Graphite Creek envisioned a vertically integrated graphite supply chain that includes a mine that would produce an average of 51,813 metric tons of graphite concentrate per year and a processing and recycling facility in Washington that would upgrade the concentrates into 49,600 metric tons of spherical coated graphite that serves as the anode material in lithium-ion batteries and 25,400 metric tons of other advanced graphite products per year.
North American automakers and the U.S. government, however, want to see a Graphite One supply chain that better matches Graphite Creek's world-class potential with rocketing demand being driven by the transition to EVs powered by clean energy.
The $37.5 million in DPA Title III funding awarded to Graphite One is half of the estimated $75 million needed to complete a feasibility study for the larger Graphite One supply chain.
Following the federal grant, Graphite One announced it had received a $5 million loan from Taiga Mining to carry out a program focused on substantially increasing the Graphite Creek resource by drilling along trend to hole 22GC079, which cut 58 meters of 4.18% graphite about 2,100 meters southwest of the current block model.
Graphite One has the option to draw down the loan in increments or all at once at an interest rate of 12% per year on the outstanding balance. As part of the agreement, Taiga has the option to purchase up to a 1% net smelter return royalty interest on 133 state mining claims that make the Graphite Creek project in 0.25% increments for every $1.25 million advanced to Graphite One.
"This funding, like the US$37.5 million DoD grant announced this week, is not dilutive to our shareholders," said Huston.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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