BlackEarth makes ASX debut on fast-track to graphite resource in Madagascar
Link copied to
Promising graphite play BlackEarth Minerals — which today made its debut on the ASX — expects to have a resource in Madagascar within six months.
Today’s listing follows a successful initial public offer that surpassed the minimum subscription amount to raise $5.45 million on strong demand.
BlackEarth (ASX:BEM) was spun out of Lithium Australia to focus solely on the company’s graphite projects and received significant support from the shareholders of Lithium Australia, with the priority entitlement offer closing oversubscribed.
BlackEarth has the potential to host high-grade graphite projects in Madagascar, where a 200-hole drilling program will kick off in the next few weeks.
Madagascar is renowned for its high-quality flake graphite and has been a traditional producer for over a century, but has never exceeded 12,000 tonnes of production annually.
Currently, annual production of flake graphite averages about 5,000 tonnes.
A Canadian listed company has a very similar project near BlackEarth’s Maniry and Ianapera projects that has a valuation of more than 3x what BlackEarth is being listed at.
Previous systematic exploration at Maniry revealed that it hosts a large-scale graphite mineralised system.
At least 34 large-scale zones of prominently outcropping graphite mineralisation have been identified over an area of 6.5km by 2.5km.
Previous diamond drilling returned intersections of 12 metres at 11.6 per cent total graphitic carbon (TGC) and 14 metres at 11.3 per cent TGC within 50 metres of surface.
The Ianapera project, which lies just 5km from the Molo project, has grades of closer to 15 per cent.
Both Maniry and Ianapera are geologically similar to the Molo project, but Molo’s grades are only around 7 to 8 per cent.
“We know if we spend around $10 million from here we’ll be in the same position as the Molo project, which has a valuation of $35 million,” managing director Tom Revy said.
BlackEarth will utilise its access to the Molo project feasibility results and engineering, procurement, construction and financing contacts to fast track its Madagascar projects.
During the first 12 months post-listing, BlackEarth plans to deliver a maiden resource, undertake early stage metallurgy and complete a scoping study.
Growing global demand
The most significant driver of future graphite demand is the expanding lithium-ion battery markets, in particular the electric vehicle market.
Graphite is used to manufacture the anode in a lithium-ion battery. Each electric car contains more than 100 pounds of coated spherical graphite.
Both the European Union and the U.S. have declared graphite a supply critical mineral. The U.S. has historically been a big buyer of Madagascan graphite.
The global graphite market was valued at US$15.1 billion in 2014 and is forecast to reach US$17.1 billion by 2020.
BlackEarth is supported by a team that collectively has almost a century of experience in the resources sector.
Chairman Phil Hearse, who has over 40 years of experience alone, has worked on African graphite projects for the likes of Magnis, Graphex and Blackrock.
This special report is brought to you by BlackEarth Minerals.
This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice.
If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a Product Disclosure Statement (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.