Northern Graphite reports first production since acquiring Lac des Iles mine; says market is 'tightening'

Northern Graphite (TSXV: NGC; US-OTC: NGPHF) sold 965 tonnes of graphite, worth US$1.5 million, and produced 1,281 tonnes in May at its Quebec-based Lac des Iles mine, which the company acquired in April.

While the sale of the majority of the mine's graphite is contracted on an annual basis, in early June the company received a spot order for 152 tonnes of the material, which Northern Graphite says shows that the "market is tightening for this type of product in North America." The company added that it currently has a backlog of orders worth 880 tonnes valued at US$1.5 million.

"It is very encouraging to see how quickly our team has been able to integrate the recently acquired Lac des Iles mine," the company's CEO Hugues Jacquemin said in a press release. "With...strong production, shipping and sales data as well as an indication that the market for graphite is tightening, we are poised for a strong finish to the year."

The Lac des Iles graphite mine in Quebec. Credit: Imerys Group

Located about 180 km northwest of Montreal, the Lac des Iles mine has been in operation for over 20 years and is among the few producers of graphite in North America. The demand for the mineral, used in lithium-ion batteries for electric vehicles, is rising as the world seeks to transition away from fossil fuels.

Northern Graphite also said that it's looking to explore the area for additional sources of ore to extend the mine life at Lac des Iles, where mining is expected to continue till late 2023 and sale of stockpiled material into 2024. As part of that plan, the company signed an option agreement to acquire the Mousseau West property, located about 80 km away from Lac des Iles.

At the Lac des Iles mine and processing plant, 19,701 tonnes of ore were processed with a graphite recovery of 89.5%, the company said. Temporary shutdowns due to operational repairs in May brought down the plant availability to 87.2%.

"With improved maintenance, elimination of a few small bottlenecks, and a seven-day operation, Northern believes the plant can produce up to 25,000 tonnes per year of concentrate," it said.

The company also reached a new, four-year agreement with 36 union employees who work at the mine, which increased benefit coverage to 100% of costs.

Aside from the mine, Northern also owns two large-scale graphite projects, Bissett Creek in Ontario and Okanjande in Namibia.

"The transformation of Northern Graphite continues, with the first pieces of equipment being ordered for our Namibian facility as well our first employees starting at the Okorusu processing plant (located 78 km away from the Okanjande deposit) last week," said Jacquemin.

At press time in Toronto, shares of Northern Graphite were trading at 49 ? within a 52-week trading range of 33 ? and 94 ?.