Cal Graphite defies critics with production decision

Lively, Ont.-based Cal Graphite has confounded the skeptics by announcing production at its Graphite Lake property near Huntsville, Ont. Located in Butt Twp. the 1,000-acre property has been the subject of some heated debate involving mining promoters and geologists.

For example a research report by a well-known promoter said Cal Graphite owns a 100% interest with net smelter royalites in “the only mine in the world capable of economically producing high crystalline flake graphite.”

High crystalline flake graphite is currently selling for between $1,500(US) and $3,000 per tonne (depending on purity).

Based on production of 13,500 tons of concentrate annually, the report predicted a stock price of $40 by this time next year. Others said grades at the property were too low to be economically viable.

Nevertheless Cal Graphite, which was vying with Princeton Resources of Vancouver and tse-listed Stewart Lake Resources, to be Canada’s second graphite producer, appears to have won the race.

Cal Graphite said its engineers and consultants are now preparing the plans and submissions needed for open pit production beginning September, 1988. As part of pre- production plans, the company will build an access road and tailings dam. A 5,000-tpd mill will also be ready by October, 1988, the company says. Ore Reserves

As reported (N.M., April 27/87), the deposit which has ore reserves totalling 29.5 million tons at an average grade of 4% graphitic carbon, is big enough to support mining at these rates for 34 years.

The company says it is planning a $1.1-million exploration program later this fall to increase those reserves.

According to President John Sterling, the 240-ft Graphite Lake orebody has a 1-1 stripping ratio. “We have spent hundreds of thousands of dollars and a year and a half developing a flotation system to grind and float flakes out without grinding them into tiny pieces,” he said.

Asbury Grafite de Quebec is Canada’s only other graphite producer. Ashbury operates a small graphite mine in Notre Dame de Laus, 240 km north of Montreal. This open pit mine, which operates during the summer months, produces about 20 tons of graphite ore per day.

In other developments on the graphite scene, Stewart Lake Resources paid Falconbridge Ltd. $10,000 last year to obtain a 100% interest in a high grade property located north of Kingston, Ont.

During the 1940s and 1950s, Falconbridge outlined two parallel lenses along a strike length of 120 m to a depth of 90 m. At that time, reserves stood at 207,000 tons grading 11.2% graphite carbon. Recent Drilling

More recent drilling on the property has increased those reserves to over two million tons grading better than 7%.

Princeton Resources, meanwhile, has spent three years outlining a deposit which has proven reserves of 14 million tonnes averaging 3% crystalline graphite to a depth of 150 ft.

Located between Ottawa and North Bay, the deposit could be the site of an open pit mine and milling facility producing 15,000 tonnes of graphite per year. Although Princeton has commissioned mineral marketing giant KHD of West Germany to do a pre-feasibility study, the results have yet to be published.