Last year Northern Graphite (CVE:NGC) leap frogged from a company holding an advanced asset to now being the biggest graphite producer in North America, said Gregory Bowes, CEO and director. Bowes spoke to Kitco on Tuesday. Graphite is enjoying an upswing due to energy transition. Graphite is the anode in a lithium ion battery and its single-largest component. On average, a plug-in EV has around 70 kg of graphite. With at least 125 million EVs expected globally by 2030, that’s more than 8 million tonnes of battery-ready graphite needed in the coming decade, according to Kitco commentator Richard Mills. In December 2021 Northern Graphite acquired two graphite mines from Imerys SA: the Lac des Iles producing graphite mine in Quebec and the Okankande/Okorusu graphite producing operation in Namibia. The $55 million financing was a mixture of debt, financing and royalty agreements led by Sprott. "It's a truly transformational acquisition for us," said Bowes. "We're going from having one advanced stage project in Ontario to being a producing company immediately. We're buying the only producing North American graphite mine, and we're buying a second mine from them in Namibia, which is on care and maintenance. We'll have it back online in nine to 12 months." With the deal done the company touts 50,000tpy of graphite production capacity, plus two large development projects with 100,000tpy potential making it the third largest non-Chinese producer. Follow Michael McCrae on Twitter: @michaelmccrae (https://twitter.com/michaelmccrae) Follow Kitco Mining on Twitter: @KitcoMining (https://twitter.com/KitcoMining)
Location location, location, where battery metal projects are situated. Our primary importance as countries seek tighter control of supply with me is Greg Bose. He is CEO of Northern graphite. Greg. Welcome to. It's a pleasure to be with you today, Michael, Greg, I want to get into Northern graphite because there's a lot of pieces and it's exciting what you're building there.
But, uh, first let's just talk about this. A battery metals market. Uh, the space has gone absolutely gangbusters of the past year with commodity prices shooting up and just a ton of M and a Greg choose. What was your favorite event or what was the most meaningful event over the past year? Oh, well, that's fairly simple.
Uh, in December we announced that we're buying the natural flight division of Emeris essay. Immersive is a four or 5 billion year old company based in Paris. They operate over a hundred minds. And companies, all industrial minerals kind of stuff. Uh, it's a truly transformational acquisition for us. We're going from having one advanced devoted stage project in Ontario to, uh, being a producing company immediately.
We're buying the only producing north American graphite mine. And we're buying a second mind from them in Namibia, uh, which is on and maintenance. We'll have it back online in nine to 12. Uh, Gus the only Northern north American graphite producer and the third largest in the world after China. Talk about the stage of the project right now that you have and go back and what you're going to be, building it up to.
Yeah. So at that mine, it was a very strategic acquisition for us. It gives us current production. It gives us transparency on the market customers market share. Um, the knock on it is that, that it only has three years of mine life left. However, we've developed a plan to, uh, not only, uh, extend, but expand that mine life by acquiring an option on a second property.
Where we can move or from that property to the lack, the decile mind. So, uh, our goal is to take from 15,000 tons a year of production to 25, which is its nameplate capacity and have a mine life of 10 to 15 years. Now in your investor presentation, you know, there's a difference between a graphite market say about a decade ago or whenever that the, uh, project, uh, the mine, I should say rather it was being built.
Uh, and, uh, you know, at the type of graphite, uh, the types of materials that how you can providing now into the future, what do you have to build? What do you have to change out to the mine in Quebec, uh, to make. Uh, nothing. Uh, it's it's, uh, it's has a reputation for having very high quality graphite and has been selling to customers for 20 years.
And, um, uh, the, the quality of the graphics. It is such that it will be very good for transforming it into, uh, anode material for lithium ion batteries. That is also true of the mind Erik in Namibia. And that is also true of the mine, uh, or the deposit that we have at this at Creek. So we have three deposits with very high quality graphite pride by independent third parties.
Uh, that is not true of every mine. And it's all, uh, very suitable for the, uh, for the battery market. Can you talk about what you're developing at Bessette? Uh, yes. So, you know, our short term girl goals, as I said, were to expand production at Lac de zeal, uh, extend the mine life. Um, we've got that under control, bring Namibia back online.
And then the third of that is developed the Bissett Creek project. Uh, That's an advanced stage project, a full feasibility study, uh, being very advanced, uh, if all the stars align and we raise financing, we could potentially start construction within a year and bring that one on, uh, 30 or 40,000 tons a year.
Uh, that will get us up to, uh, closer to a hundred thousand tons a year of. Of production and capacity. And then we have two very big development projects. Uh, after that, in the pipeline, we can double the production of visit Creek and in the future, the battery market grows. We have the measured and indicated resources to do that.
And the operation in Namibia is based on a weathered resource underlying very large measured in indicator. Hardrock resource, which, uh, has the potential to produce a hundred to 150,000 tons a year. So the ultimate production capacity of all of these deposits is over 300,000 tons a year. We'll be at 50, uh, within nine to 12 months.
And we will expand from there. What's the processing facility like for graphic mind, how would that compare say to like a copper or to a gold project that you might be paying. Uh, fairly similar, um, crushing, grinding and flotation, uh, using the flotation process to separate the pipe from the, uh, from the waste rock.
Uh, there are a few nuances to graphite depending on how. Crushing grinding. And so you have to do to eliminate the impurities and get the concentrate up to a salable purity level. But generally I'm generally pretty much the same. Um, now you mentioned in your investor presentation that you wanted to bring some pricing transparency.
Why is that important? Uh, because the graphite, like, like most industrial minerals is difficult for investors to, um, understand their heads around. Um, part of that is because it's not just gold, it's not just copper with graphite and other industrial minerals. You can have a lot of different grades and that's confusing.
And also there's no real spot or futures market where you can look up the price every. Uh, pricing is pretty much negotiated between the buyers and the sellers. Then there are services out there that give you an indication of what prices are, but unless you're on the inside of the industry, you never really, uh, the major, um, the major, uh, customers, uh, for the graphite.
Uh, those are going to be auto automotive makers. Uh, Uh, as of right now, not yet. Um, the lack dizzy of mine is doing quite well and yelling to industrial traditional users of graphite and Namibia. We'll do the same in the starting a startup phase. Uh, we need to build the capacity to take that concentrate and transform it into anode material that can be used directly in batteries.
And currently 100% of that is done in China. So we need that capacity in the west. Namibia has very good access to the European market, the west coast of Africa, five hours from the main deep water port on that side of the country, which is one of the attractions for MROs when they built the mine. So very good access to.
Europe. And then, uh, this had Creek and lacked. The zeal of course, are in north America, which gives us a big advantage over African projects and Chinese projects. So our ultimate goal is to have a processing plant in Europe and one in north America, supplying the battery market. Uh, what's the difference between a synthetic graphite and a mind graphite.
And also, is there a potential for a synthetic graphite to display? So what's happening with minor, such as. Um, that's a very long question, but I'll finish as short of answer as I can. A synthetic graphite is a manufactured product, so it is made from petroleum Coke. You're basically take as a, do the refining process and through a very high temperatures, converting it to the graphite crystal structure that is very energy intense.
That is very, uh, causes a lot of pollution. So it's not an environmentally friendly, uh, process, if you will, which is why most of it is done in China. Uh, synthetic graft. I tend to use is used in batteries as well as natural. Natural is a mind, uh, product, um, uh, batteries internationally. I I'll say are a blend of both to take advantage of the best features of both.
And most people expect that the percentage of natural will increase over time because it is cheaper. It has higher capacity and it has a much lower environmental. Uh, can you catch us up with, uh, China right now? Um, I, you know, I assume it's going to be, I assume it is. Um, as you said before, it's producing a lot of the world's graphite, but I assume it's also going to be a large consumer, just, uh, what they're building up with their battery metal plants.
Uh, but, uh, there's also that large tie up right now that they have with, uh, Singapore and terms of, uh, the COVID disruptions.
Um, local secure, uh, sustainable supply chains are where it's at. So with China first, the, uh, the potential that they could use, um, uh, graphite as a weapon in terms of nationalistic policies that don't make it a bit. Whoever else. Uh, secondly, it is the biggest and fastest growing EAV market in the world.
So they may not have product available. And thirdly, um, there, uh, ESG standards are a lot lower than ours and, uh, so therefore you have a product that is a. Not very green, shall we say? And fourthly, you have transportation issues, whether it's COVID um, the container market is totally in disarray, the blockage of the Suez canal.
Uh, it kind of, uh, goes on and on. So, um, yeah, so having a local secure source of supply, that's a big part of our strategy mines in north America and mine in Namibia to supply. Uh, to avoid, uh, the China syndrome. If you want to put it there. Talk more about, uh, that local insecure, Greg, uh, you know, there's been a lot of companies that are building themselves this way.
There is a Sierra resources which had that a hundred, a hundred million dollar, um, a loan, uh, that I got from the department of energy that was announced yesterday. Piedmont is also then putting together a lot of, uh, infrastructure and processing facilities in, uh, America. So when you're talking to. Uh, your supplier is when you're talking to your investors, what does a secure and a, what does local mean, Greg?
Uh, yes. Um, I guess it means different things to different people. Uh, for example, Sera, their mind is in Mozambique. So you have political colon tradition issues. That material, I guess, is going to be transported to Louisiana where the upgrading facility is being built, uh, uh, where that loan. Well, we'll be applied, um, in our case, uh, with visit Creek and lack the zeal in north America.
Uh, we are 10 hours by truck to Michigan, where there are three or four major battery plants. You operation. Uh, or under construction. So basically no ports, no borders because we have free trade with the United States. Uh, that is a local supply chain. It is a transparent, secure supply chain. Uh, the end user knows where it comes from, how it was presented, how it was shipped and, uh, there's the potential for, uh, Not just political interference, but let's say black Swan events, like COVID that come along, that nobody can anticipate.
Um, or the blockage of the Suez canal would be another one. Um, those don't exist, uh, with, with a project like ours. So it's a question for the buyer. How much risk do you want to assume? Do you want to switch your, um, China risk or, um, uh, politically unstable country in Africa? Uh, we happened to be in Namibia, which is probably the best or wellbeing.
The, uh, it is the best jurisdiction in Africa in which you operate in our opinion. Uh, is there a place, a geographically endowed or place that you think of, uh, when you think of graphite? I think of Nevada when I think of gold, for example. And then I think of, uh, and when I'm thinking of lithium and one, I'm thinking of copper, I'm thinking of, uh, Chilean.
Um, yes. Um, the main producing area in China is he long James and proper, which is in the north up by the Russian border. And the mines closed down for during the winter time because of the weather. There's a, a belt in Africa, um, Tanzania and Mozambique. There's a lot of deposits. Uh, they're mainly owned by Australian companies and then.
Here in Canada, we have our visit Creek and, uh, this had Creek is 14, 15 kilometers from the border with Quebec. And then on the back side, there's five or six deposits, uh, including the lack dizzy hill mine that we are buying. So those areas plus Brazil, uh, Brazil has, um, fairly large, uh graphlite um, Um, production level.
Uh, lastly, Greg, uh, you have a lot on your plate right now with the financing announced and, uh, the, uh, operations that you're bringing on, uh, milestones over the next 12 months for Northern grads. Oh, lots, lots. Uh, again, the plan to, uh, expand and extend the mine life. For lack the zeal, bring the, maybe a back on line, start a feasibility study for the big project in Namibia, advanced Bissett Creek towards production.
And. Um, announce a plan, uh, to produce anode material in north America and probably Europe as well. We've been holding off on that because a fairly conservative company, we want to have a realistic, achievable plan to do that. And, um, I think all of the auto and battery makers are looking for companies to fill that void between the mind and the battery, the upgrading.
And that's what that a loan, a hundred dollars, a hundred million dollar loan you mentioned is all about that's one company that's doing it, but there will need to be four or five in north America doing that. And, uh, we in the one of them and we'll be announcing that plan in the coming months. Great.
Thanks for speaking with Kitco.
He is Greg bows. He is CEO of Northern graphite. My name is Michael McCray and you're watching kick on Monday.