Company Overview: BlackEarth Minerals NL
Operating in the metals & mining space, BlackEarth Minerals NL (ASX: BEM) is focused on quality resource projects in Australia as well as global markets. The principal activity of the company is to identify, evaluate and acquire resource projects and assets. BEM has its mining strategy built across assets that are rich in graphite, a low-cost, high-value product, for which demand is expected to increase in the coming years. The company plans to benefit from the anticipated shortage and higher prices of graphite in the coming years.
BEM is primarily focused on developing the Maniry and Ianapera highly prospective graphite projects in Madagascar. Other projects of the company are currently in the early exploration phase and are located in Western Australia. All the projects of the company are expected to be advanced in their flake graphite prospectivity, as well as capable of timely development. The West Perth-based minerals development company was incorporated in the year 2016 and was listed on the Australian Stock Exchange in January 2018.
Positive Anode Market Purification Specifications
On 03 September 2019, BEM announced positive updates with respect to its flagship graphite project in southern Madagascar, Maniry. Independent test work on concentrate from the Maniry graphite project has delivered high purity graphite anode materials. The concentrate met the purification specifications required by the manufacturers of lithium-ion anode materials, as the test work achieved 99.97 per cent carbon purity, and purification more than 99.95 per cent is generally considered challenging to achieve.
Source: BEM’s Report
According to independent German test laboratory, Dorfner ANZAPLAN (Germany), which generated the results, potential exists to further boost the achieved purity level as well as lower acid consumption significantly, subject to performing additional test work. The results generated are only for acid purification. Dorfner is currently engaged in investigating thermal purification as an alternative, as part of BEM’s comprehensive battery test work program, which is scheduled for completion in November 2019.
Potential Off-Take Agreements
With initial test results exceeding the specifications required for marketable battery grade graphite, the company has achieved a significant milestone, as it inches closer towards entering into potential off-take agreements. BlackEarth Minerals is at present in talks regarding potential off-take agreements. The company has entered various confidentiality agreements with interested parties, which have requested BEM to share the concentrate samples, as they intend to perform confirmatory in-house test work, before potentially executing off-take agreements with the company. Furthermore, BlackEarth Minerals intends to continue discussions with potential end users in order to sign a formal offtake agreement in the near future.
BlackEarth Minerals expects the completion of the ongoing bulk sample test run at ALS in Perth in September 2019.
Meanwhile, BEM plans to keep the market updated with all the activities that are of interest and play a major role towards the end-user qualification process and ultimately executing formal off-take agreements with enterprises that lead the industry in anode production, expandable product and refractory material areas.
Expressing his contentment towards the recent results, Tom Revy, BEM Managing Director, stated that the results would aid the company in moving ahead with off-take agreements and find a suitable off-take partner, which is critical for advancing the flagship project and seeking finance. Meanwhile, Tom unveiled the company’s intention of becoming a top player supplying quality graphite to global markets.
Spherical Graphite Market Specifications
The recent results complement the spherical graphite market specifications announced by the company in relation to the Maniry project on 12 August 2019. In the announcement, BEM had unveiled that spherical graphite is consistent with specifications required by the producers of lithium-ion anode materials. In the testing, a maximum spherical graphite production yield of 52 per cent was achieved, which was a major milestone for the company as the industry average stands at 40 per cent.
The concentrate for the testing was generated from the initial bulk sample pilot run, which was concluded in December 2018. The testing, which was undertaken by the German company, had secured positive comments from China-based producers of spherical graphite as well as manufacturers of anode materials.
Below figure covers the main characteristics related to the shape and roundness of the material and particle size distribution as well as specific surface area. All these are key elements, as they are required by the producers of lithium-ion anode materials.
Spheroidization Results (Source: Company’s Report)
BEM plans to finalise the Maniry project’s feasibility study in 2020, with project commissioning anticipated in the following year. The current project study outcomes have demonstrated the Maniry Project as a robust and financially attractive graphite project in terms of standards across the world.
Post the completion of the scoping study, conducted by BatteryLimits in Perth, the company has transition from a graphite explorer to a graphite developer. The Maniry project is expected to have a life of 10 years and produce 30,000 tonnes per annum of graphite during the initial one to three years. Fourth year onwards, the Maniry project is likely to have a graphite production of 60,000 tonnes per annum.
Graphite Industry in Madagascar
Madagascar is a major supplier of graphite to countries including the Asian nations (China and India) and the United States. The African country is also known for manufacturing very large size flake graphite.
As domestic demand for graphite is growing in China, India and the US, natural graphite imports from Madagascar to these countries is also anticipated to increase. Over the last one and a half years, monthly exports of flake graphite from the African nation to China and India grew by over 12 per cent and 4 per cent, respectively. Meanwhile, the largest North American country, the United States, has significantly boosted the graphite importation from Madagascar, making it the fifth largest supplier of natural supplier to the US.
BlackEarth Minerals has a market capitalisation of around AUD 6.9 million. On 05 September 2019, the BEM stock was trading at AUD 0.061 with around 29,780 shares traded (as at AEST: 12:00 PM).
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