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Big North Graphite (V.NRT) is first junior graphite play to sell product it mined

Peter Grandich
0 Comments|August 15, 2013

The mining junior said it has sold its first 200 tons of amorphous graphite to a buyer in Mexico, becoming the first to achieve that milestone.
On April 29, this year, I published my first piece about Big North Graphite Corp. (TSX: V.NRT, Stock Forum), a junior graphite development company that is pursuing the under-talked about amorphous graphite market.  
 
As I have written before and re-tell below, simply put, it’s not how much graphite you may have or how much you might produce, its whether or not you can actually sell it.
 
Today, Big North had “big” news.  Big North Graphite sold its first 200 tons of amorphous graphite to a buyer in Mexico, the company said in a press release. 
 
Shares of Big North Graphite were unchanged Thursday at 7 cents, leaving a market cap of $2.7 million, based on 38.8 million shares outstanding. The 52-week range is 11.5 cents and 3 cents.

By making this sale, Big North is the FIRST known junior graphite company to sell graphite that it has mined and processed.  Also as an important part of Big North’s business strategy, some of the product sold included graphite purchased from other mines in the area and processed by Big North.
 
 A rarity in the junior resource world, Big North has now seen its first revenues.  The company managed to achieve this goal less than 9 months after closing the acquisition of their assets in Mexico, a truly impressive feat in the junior space. 
 
At the time of my first piece about Big North, I made two points clear:
 
The first was that “graphite is a race to the finish line” IMHO.  The graphite market is finite and therefore not all projects will be able to feed the market.  Graphite producers will need to find a “home” for their product in order to be successful and IMHO, the first companies that have the ability (product) ready to supply the market can “win”.

Today’s news not only shows that Big North has graphite to sell but also that they found a home for it. Sounds like a win to me.
 
Second, I stressed the importance of SALES for Big North, saying that in my opinion, graphite sales would be “one of the biggest catalysts for this company”.  Today, that catalyst has been achieved.
 
The amorphous graphite market account for approx 55% of the 1.1 million tonnes of graphite produced in 2012 and is the largest segment of the natural graphite market.  To the best of my knowledge, NRT is the only TSX Venture listed junior graphite company pursuing an amorphous project, so their ability to grow the business seems quite exciting. 

In 2012, approx 90% of amorphous graphite was produced in China and end users are looking for alternative supply. 

There is zero amorphous production in the USA at present.  Big North plans to grow the business and is actively pursuing additional sales agreements.
 
The Bottom Line

It’s an exciting time for Big North, as the company has executed well in a short period of time.   It is still the early days in the sense of stock price.  As the company continues to grow the business, and if Company President Spiro Kletas continues to execute on the business plan and goes to full processing, shareholder value has strong upside potential.

It is good to note that these value-add plans do not require a lot of capital and can be affected quickly and easily (months not years) according to my discussions with Management.  Considering the speed at which the company has delivered so far on this project, we will be keeping in close contact with Big North and report back to readers on any new developments.

Here is a link to a previous graphite article:
http://www.grandich.com/2013/04/grandich-client-big-north-graphite-corp/
 


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