VN2 shows a high purity vein that has a width of 1.5 meters+. A rock saw was used to obtain graphite samples sent to the Novi Battery Show in Detroit. (Photo: Company)
Bruce Duncan’s Canada Carbon (TSXV:CCB) published results of a chemical characterization of material from the company’s 100% owned Miller hydrothermal lump/vein graphite property in Quebec, Canada. The news release suggested graphite from Miller “May be suitable for applications requiring ultra-pure grades, such as some core components of nuclear reactors.” Shares in the company traded heavily on Tuesday, with over 3.5 million shares exchanging hands. The stock price reached $.26 mid-day, but closed even at $.20.
Duncan
I reached out to CEO Bruce Duncan by phone to explain today’s news release. The colourful, fast talking Mississauga, Ontario based mining executive told me the quality of graphite at Miller is “Unprecedented.”
“Wake up with your coffee and read the press release again slowly,” Mr. Duncan said. “Unlike other graphite companies we put a lot of detail in our press releases.”
“We have been able to show that Miller graphite is suitable for use in nuclear reactors, with a rating of .94 parts per million. So you know, these numbers are basically unheard of. A copy of these samples will be sent to the DOE (Department of Energy in the US) and also the National Research Council in Ottawa.”
Although an official production decision has yet to be made, Duncan made it clear on our call that his objective is to get Miller into production as fast as possible. The company’s engineering consultants are considering a simultaneous production and exploration scenario, Duncan explains. He thinks there is enough material at or near surface to go into production, which will likely cost less than $4 million in cap costs (all figures estimates).
High quality graphite is selling for as much as $15,070 per kilogram, according to one industry web site, Graphite.com.co, which might make Miller a cash cow in the future (Note: sources tell us enriched graphite prices are more like $10-15k per ton, not per kilogram, and vary widely depending on quality; there is no transparent market data available). Still, without a resource or independent economic study of the project, it’s too soon for investors to make such assumptions.
According to Duncan, the market for high quality graphite and nuclear graphite in particular is much bigger than the brokerage industry in Canada assumes. Duncan says his company will not have difficulty selling its product, and believes the company can hold an auction when the time comes.
Mr. Duncan says his company has all the logistics covered off. “We have the water, power, rail, we’re 1KM from paved roads. We’re 6.9 kilometers from a Tim Hortons.”
Like any good mining promoter, Mr. Duncan thinks his stock’s cheap. “Our market cap is roughly $14 million bucks, it’s nothing. We have $700k in the till and are not looking to raise money currently. We have no debits. We owe nobody.”
Canada Carbon’s burn rate will vary depending on exploration, but Duncan says he runs a tight ship, with fixed costs including salaries, accountants and lawyers of under $25,000 per month.
Duncan also reminded me that he has invested over $1.2 million of his own after tax dollars in the company over the past several years.
“This is an asset that’s crying out for extraction.”
“When it’s at surface and shallow, you don’t need a lot of money. Not to mention it’s high grade, you can crush and float the material.”
Our conversation ended abruptly with Mr. Duncan having to take another call. His ringtone, to the tune of The Good, The Bad and The Ugly, made me smile.
Canada Carbon trades on the TSXV under the symbol CCB.
Disclaimer: Please see Canada Carbon's Cautionary Note Regarding Forward Looking Statements. All facts to be verified by the reader. This is not investment advice. Always do your own due diligence.
