Positive Metallurgical Results and Strategic Positioning Boost Graphite Outlook

Graphano Energy Ltd (GEL:TSXV;GELEF:OTCMKTS) has announced positive initial metallurgical results from its projects in Quebec, Canada. Conducted by SGS Canada Inc., the tests on composite samples from the Lac-Aux Bouleaux (LAB) and Standard mine properties produced commercially viable graphite products using standard processing methods.

Chief Executive Luisa Moreno commented, "We are extremely pleased with the preliminary metallurgical results for our LAB and Standard mine properties, having achieved commercial-quality products using standard processing methods."

The tests faced some challenges, such as overgrinding in the LAB project, but subsequent tests with reduced grinding time achieved a concentrate grade of 95% graphitic carbon (Cg) with a 70% recovery rate. Further closed-circuit operations are anticipated to enhance recovery rates to 90% or higher.

In contrast, the Standard Mine project delivered excellent metallurgical results from the outset, with sample 4 producing a graphite concentrate grading 94% Cg at a 93% recovery rate. Future optimization tests are expected to further improve these grades and recoveries. Despite the different flowsheets used, Graphano's technical team is confident that both LAB and Standard materials can be processed in the same beneficiation plant, ensuring efficient processing whether the materials are treated separately or combined. The next phase of metallurgical testing will focus on enhancing recovery and grades and studying flake size distribution.

Regarding Graphite...

The graphite market is poised for significant growth over the next decade, driven by expanding industrial applications and increasing demand in key sectors. According to a recent report from Grand View Research, "the Graphite Market size is estimated at USD 3.62 billion in 2024, and is expected to reach USD 4.63 billion by 2029, growing at a CAGR of 5% during the forecast period (2024-2029)."

Given these favorable conditions, Technical Analyst Clive Maund rated Graphano Energy as an "Immediate Strong Buy."

Furthermore, "the global graphite market size reached a value of around USD 17.97 billion in 2023. The market is further expected to grow at a CAGR of 5.4% between 2024 and 2032, reaching a value of around USD 28.93 billion by 2032", in a report from Mordor Intelligence.

The market growth is bolstered by the rising utilization of lithium-ion batteries in portable electronics and electric vehicles. As Mordor Intelligence went on to say, "The market growth for graphite is being supported by the rising utilization of lithium-ion batteries in portable electronics and electric vehicles." This is further supported by an increase in steel production in Asia and the Middle East, significant factors driving the market studied in the short term. Additionally, as written on Grand View Research, "the increasing application of graphite in green technologies is likely to create lucrative growth opportunities for the global market soon."​

The rising crude steel and aluminum production worldwide is also expected to drive demand for graphite in metallurgical applications, with "refractories, casting, and foundries anticipated to be one of the leading applications of graphite in the market," Mordor Intelligence mentioned in their 2024 Graphite Market Trends.

Graphano's Catalysts

Graphano Energy Ltd. is strategically positioned to benefit from the growing demand for graphite, driven by its essential role in green and sustainable technologies.

According to the company, "Graphite is one of the most in-demand technology minerals that is required for a green and sustainable world." The company's historic property in Quebec, Canada, provides a solid foundation for future growth. Graphano aims to meet the increasing demands of prominent industries such as lithium batteries for electric cars and robotics.

Graphano's property in Quebec has historically been a natural resource for graphite, a mineral crucial for various technological advancements. By sourcing high-quality graphite and later partnering with material processing and distribution companies, Graphano positions itself as a key player in the supply chain for battery-grade graphite. The company's approach ensures that it can meet the high-quality standards required for these cutting-edge applications.

The market performance of Graphano Energy Ltd. (GEL) recently saw a decrease. As of the latest data, the stock price is at CA$0.0950, showing a change of -0.01 (-6.25%) on a trading volume of 76,500​ according to MarketBeat. Despite this short-term fluctuation, the company's strategic initiatives and positive preliminary metallurgical results indicate a strong potential for future recovery and growth.

Overall, the recent metallurgical test results highlight the potential of Xanadu Mines and Graphano Energy in their respective markets. Both companies are positioned to leverage their recent achievements to drive future development and success.

What Experts Are Saying

*Technical Analyst Clive Maund recently underscored the robust investment prospects of Graphano Energy Ltd. in his May 28, 2024, report. Highlighting the intensifying global debt crisis, Maund predicted a capital shift towards tangible assets like graphite, anticipating substantial price increases. "The intensifying debt crisis is expected to lead to a capital flight from all debt instruments and fiat, generally into tangible assets and specifically into commodities such as graphite, all of which are expected to soar," Maund explained.

He emphasized that Graphano Energy, with its strategic location and promising drilling results, is well-positioned to capitalize on these market conditions. "Graphano Energy has [four] graphite-bearing properties that are quite close to each other in Quebec, with the flagship LAB (Lac Aux Bouleaux) property being adjacent to the only producing graphite mine in North America," Maund stated. He further pointed out that the company's properties could benefit from economies of scale, noting, "Once developed, the company will benefit from economies of scale since the ore from all [four] properties can be trucked an acceptable distance to one processing center."

Maund also highlighted the macroeconomic factors favoring Graphano Energy, such as upcoming tariffs on Chinese graphite imports. "China announced restrictions on the export of graphite to the U.S. and other countries, and it was very recently in the news that the U.S. is to slap a 25% tariff on natural graphite imports from China starting in 2026" (on top of the 13% value added tax for materials exported from China) he mentioned, indicating that this would make North American producers more competitive. Given these favorable conditions, Maund rated Graphano Energy as an "Immediate Strong Buy" and suggested that the company's stock is "in a position to break out of a large base pattern and is at a very good entry point."

Ownership and Share Structure

According to the company, about 15% is owned by insiders and management, 3.5% is owned by institutions, and the rest is retail.

According to Reuters, as of June 17, Michael Bauer owns 10.05% or 1.72 million shares, Director Nathan Rothstein owns 6.94% or 1.19 million shares, Chief Financial Officer James A. Richardson owns 0.46% or 0.08 million shares, Director Roger Dahn owns 0.20% or 0.03 million shares, and Moreno owns 0.20% or 0.03 million shares.

The company has 17.09 million shares outstanding, including 14.03 million free-float traded shares. It has a market cap of CA$1.71 million and trades in a 52-week range of CA$0.25 and CA$0.09.

Important Disclosures:

1. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
2.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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* Disclosure for the quote from the Clive Maund article published on May 28, 2024

1. For the quoted article (published on May 28, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500 in addition to the monthly consulting fee. 
2. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts’ Diploma in 1989.  The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed.

Clivemaund.com Disclosures

The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.