Last month I paid a visit to the Miller graphite project in Canada, under development by Canada Carbon Inc. (TSX.V:CCB) in Grenville Township, Quebec. The Miller property was the home of a historical graphite mine in the latter half of the 19th century.
Grenville is situated 50 miles west of Montreal, approximately half way between that city and Ottawa. The journey from Montreal took about 75 minutes via Highway 50. Grenville is close to the town of Hawkesbury in Ontario, with the two sitting on opposite sides of the Ottawa River, which forms much of the boundary between the two provinces.
Generally I don’t visit a mineral project under development, until it has an associated mineral resource estimate that conforms to guidelines such as NI 43-101 or the JORC code. It’s the same criterion that I use for including projects on the TMR indices for rare earths and for graphite. A mineral resource estimate is a useful initial filter for discerning the evolution of technical knowledge associated with a given project. Miller does not have a mineral resource estimate yet; I had, however, heard about the unusual nature of the Miller project (which we’ll get into later) from a number of sources. I therefore decided to accept an invitation to come visit the property, to see for myself. Canada Carbon published a technical report on Miller in May 2014, which follows the NI 43-101 guidelines, in addition to other data associated with work on the project. This report did not include a mineral resource estimate.
I was hosted on my visit by Bruce Duncan, Executive Chairman and CEO of Canada Carbon. Also joining us were Steven Lauzier, the project geologist, and Rémi Charbonneau, a consulting geologist who is the Independent Qualified Person for the project.
The initial exploration work at the Miller property started in February 2013, with a ground survey to locate the original Miller Mine, and to confirm the presence of graphite veins and pods. Subsequent work consisted of additional ground and airborne prospecting work, identifying a series of anomalies via geophysical techniques such as small-loop frequency-domain electromagnetic (MaxMin), very-low frequency (VLF), induced polarization (IP) and versatile time-domain electromagnetic (VTEM) surveying. Significant anomalies of interest were then targeted for ground trenching, accompanied by core drilling.
The trenching work identified a number of graphite veins and pods throughout the property. The graphite can be found alone or associated with minerals such as wollastonite and pyroxene. It has also been found in disseminated form in marble and sulphide-bearing paragneiss, but the veins and pods are of primary interest because of their high grade and potential purity. Mr. Lauzier indicated that veins with grades of 40-80% carbon as graphite (Cg) and pods with grades of 10-15% Cg are common on the property.
Through the trenching work, the company identified three significant showings, designated VN1, VN2 and VN3, and which we visited in turn. The first of these, VN1, contains an irregular vein of semi-massive, coarse graphite, originally under 1-3 m of glacial till, along with pods of graphite mixed with wollastonite. The rocks here consist of banded paragneiss and marble units. The primary vein is exposed along a strike length of 12.8 m, with widths ranging from 10 cm to 1.7 m. Numerous secondary veins can be seen.
VN2 has a massive graphite vein up to 1.5 m thick, and numerous secondary veins and pods which follow the contact between the local marble and paragneiss rocks. Core drilling at this showing indicates that this contact is at least 39 m deep below the surface. VN3 is another massive graphite vein, some 2 m thick and 5 m long, hosted in unaltered marble. Six shallow cores were drilled at this site and the graphitic horizons were encountered below surface, confirming the initial event of the anomalies. You can see these showings in the images below.
Mr. Lauzier indicated that there are numerous additional graphite-wollastonite pods on the Miller property that have been exposed during trenching. The pods are pegmatitic in nature and generally occur in the contact zone between the paragneiss and marble. Numerous graphite veins have also been discovered as well. Mr. Lauzier commented that the graphite veins are likely the result of the transportation of carbon in hydrothermal fluids, which were channeled up through fractures in the rock over time. As the fluids cooled to 700-800 °C, the graphite was precipitated in large, highly crystalline flakes.
During my visit, on-ground grids for additional IP surveying were being prepared across the property.
So what is the big deal about this type of graphite? The formation of hydrothermal veins leads to the presence of very high-purity graphite and such occurrences are rare. The only current source in commercial quantities is the island of Sri Lanka. Once extracted, the graphite is relatively easy to process. The high degree of crystallinity in vein graphite (as a result of the way that it was formed), leads to thermal and electrical properties that are superior to the more typical natural-flake graphite, which forms from carbonaceous sedimentary deposits under heat and pressure. The most interesting and potentially lucrative applications for hydrothermal graphite materials, however, are in the nuclear industry.
So-called nuclear- or reactor-grade graphite is high-purity graphite that is used as a moderator material in thermal nuclear reactors that utilize uranium. Moderator materials are used to convert so-called fast neutrons into thermal neutrons during the fission process, which leads to a sustained (and controlled) chain reaction, and the liberation of significant quantities of energy. Reactor-grade graphite can also be used as a neutron reflector, which can be used to generate a chain reaction from a mass of fissile material that would normally not ‘go critical’ without the presence of the reactor material. In essence, it reduces the amount of uranium or other fissile material required, to sustain a chain reaction.
Because of the interaction of the graphite with neutrons during the nuclear process, it is vital that the material be free of impurities that will absorb neutrons. Boron is the most problematic impurity in this regard; reactor-grade graphite must have a boron, or equivalent-boron content (EBC), of less than 5 ppm. EBC is a measure of the collective effects that all impurities present have, on neutron absorption.
In June 2014, Canada Carbon announced the completion of purity testing on lump / vein graphite samples taken from the Miller property, indicating that a simple flotation process alone could produce graphite with purities of 99.8-99.9% total carbon (C(t)). With an additional simple thermal process, exceptional purities of 99.98-99.998% C(t) were achieved. Significantly, the EBC of the material after flotation concentration alone was 1-3 ppm, confirming that the material is nuclear-purity graphite, without needing hydrometallurgical treatment of any kind. Such material commands significant price premiums over more conventional natural graphite. Test results showed particularly low levels of sulfur in the graphite. The ease of upgrading via flotation would indicate that the impurities present are found at the surface of the graphite flakes, and not significantly intercalated or embedded in the material as is common with more conventional natural flake graphite. The company has published its assays on its website, so that calculated values such as EBC can be reviewed.
Miller is located on private land, whose owners entered into a surface-access agreement with Canada Carbon. Relations between the company and the land owners are apparently cordial; during the visit we met one of the owners, who is supervising the excavation of bulk sample materials from the site, on behalf of the company. Canada Carbon has permission to remove up to 480 t of materials from the property for processing in a pilot plant, to be built by SGS Canada Lakefield (SGS), and based on the aforementioned initial bench-scale flotation process, previously developed by SGS. The company is in the process of crushing and shipping the first 100 t of material from the site, and has until February 2015 to complete the rest of the sampling.
The property is well serviced logistically; In addition to Highway 50 and a power line which both cross the property, there is a rail line less than half a mile south of the highway and access to water via a river which also passes through the property.
The graphite veins and pods that are present at the Miller property make it highly prospective for the production of nuclear-grade graphite – but they also make it a real challenge to be able to produce a traditional mineral-resource estimate. Such estimates are typically derived from drilled samples taken across a project, with the mineral content found within the cores used to establish a 3D model of the geology of the deposit. This is fine in a deposit where the graphite or mineral of interest is disseminated spatially in the host rock; but when graphite occurs in highly concentrated veins and pods, drill results are likely to be ‘hit or miss’, with mostly ‘miss’.
This is one reason why the identification of graphite occurrences starts with electromagnetic and other geophysical surveying tools, followed by on-the-ground trenching; given the thickness of the initial veins and pods trenched, there should be little trouble in finding significant quantities of graphite on the project. Without a way to properly quantify that graphite however, within the wider project space, how does one move the project forward into a preliminary economic assessment or pre-feasibility study, which will comply with the requirements of NI 43-101? Just as important, how do potential future off-take partners develop a comfort level that the graphite will be there, in the years to come?
I put these questions to Mr. Duncan, who acknowledged the challenges right away. He commented that the unique nature of the deposit has already generated significant interested from end users, who are not only interested in the graphite for its potential nuclear applications, but also for other end uses where very high purity and / or crystallinity is an absolute requirement. He said that such end users are used to acquiring materials from Sri Lanka, where mining is conducting on a rolling basis; resources are identified and then put into a mining campaign with a one-to-two year horizon. As the known occurrences are depleted, new resources are identified by drilling and put into the queue for subsequent mining. Many airborne EM anomalies were found out over the Miller Property. An IP survey on anomaly E1 revealed many different conductive and chargeability anomalies. It appears that the Miller Property could contain sufficient newly discovered graphite occurrences to develop a model based on exploring and mining the discoveries as they are made, without developing a resource model for the property as a whole.
This approach does not necessarily lend itself well to traditional mine financing of course, but Mr. Duncan indicated confidence that the project could be bootstrapped into operation, with a combination of advances on future off-takes from strategic partners, and other non-traditional sources of financing, that do not necessarily require placements in the open market (and which would require greater detail in terms of mineral resource estimates and the like).
While SGS continues to process the initial 480 t of material from the Miller stockpile, Mr. Duncan said that the company will also continue with characterization and purity tests of the graphite material, provide samples for potential end users as well as advancing further exploration of the Miller property. Although he would not comment on capital expenditure estimates – due to regulatory compliance – the cost of mining graphite at the Miller property holds the potential to be comparatively low, versus a conventional open-pit graphite mine in a more remote location. Given the accessibility of the graphite veins, and their apparent thickness and shallow depth (and, in many instances, their location at surface), Canada Carbon’s extraction costs may be particularly low. If the thickness of the initial veins and pods trenched to date, is found elsewhere on the property, then significant quantities of graphite may be present.
Since my visit to the project, Canada Carbon has released additional test results that indicate that certain properties of the Miller lump / vein graphite match or even exceed those found in synthetic graphite. Both tap (bulk / unprocessed) and skeletal (actual) densities were shown to be close to that of synthetic graphite; the specific surface area and porosity levels of the Miller graphite were found to be significantly lower than for synthetic graphite, which is particularly desirable in the production of anodes for lithium-ion batteries. This combination of properties means that once commercially available, graphite produced from the Miller property may be able to command prices as high as $10,000-20,000 / tonne, based on recent cost estimates from the likes of Industrial Minerals and others for synthetic graphite.
The Miller property is clearly an unusual and possibly unique graphite project; and given the indications that lump / vein graphite sources in Sri Lanka are diminishing, a hydrothermal lump / vein deposit in North America would be highly attractive to numerous end users. The key challenge for the project will be to be able to put in place a financing structure that will allow the project to go into commercialization, without the benefit of establishing a minimum level of confidence in the size of the resource present, using the usual means of reporting. Nevertheless, if strategic and other partners can be persuaded to work with Canada Carbon on the basis of the excellent metallurgical results obtained to date, the project has a good chance of going into operation.
My thanks go to Mr. Duncan, Mr. Lauzier and Mr. Charbonneau for hosting my visit, and for numerous useful discussions.
Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Canada Carbon Inc. He did not receive compensation from Canada Carbon or from anyone else, in return for the writing of this article.
I am now in the process of uncoving a graphite deposit here in the states …this deposit was discover ed two years ago and I and the owner are in the process of pulling a sample out in a kilo gram and submitting said sample to Aslays Graphite Corporation in New Jersey for particle size and grade …there other deposit s here in the states this one caught my attention two years back…the graphite we have is a little darker but very very similar this deposit is soft with flake s being observed very similar ti fuerllenes. Just wish it was
Thank you Gareth for a very informative piece.
One of the questions that comes to mind is how much flexibility do you think there is in the Quebec mining act to allow for a somehow quicker route to commercialization? I am thinking that with your REE separation project in Quebec, you might have some familiarity to the mining regulations (although your project is technological in nature and does not involve actual mining).
Thanks Gareth. Appreciate the article. I like the company and the property. I think the potential is very high and there is no doubt that the graphite is unique in its own right.
What seems to work for both the company and the shareholders is a quarrying concept and should facilitate an income while they expand. Sort of a pay as you go model.
Thanks again for covering this company. I know you must have many pounding on your door wanting you to visit. The fact you chose CCB is appreciated by the shareholders.
Getting your face on the map is tough nowadays thanks for the exposure.
Good report as usual. Are you familiar with Elcora? It is a newly public graphite story with a deposit in Sri Lanka. Approximately 80% of the deposit is lump graphite.
When we can get the mineral resource estimate of this Canada Carbon Miller project, which was the home of a historical graphite mine.
Gareth at al. – thank you for excellent report and good inspiration…
The dominant need now is to find sufficient tons that can be extracted economically in such a manner to make a mine. That is not apparent at present.
@SteauOilers: there are definitely folks out there with a better understanding than me, of the nuances of the mining laws and regulations in Quebec.
@Dennis Bremner: thanks for the comments. The quarrying concept has been mentioned by a number of folks; the “pay as you go” model is apparently how this is done in Sri Lanka. How that might translate to a project in Quebec remains, of course, to be seen.
@Romeo D’Angela: good to hear from you. Yes, I am becoming familiar with Elcora Resources, and their Ragedara project in Sri Lanka. If your goal is to explore for new sources of Sri-Lankan-style graphite, then Sri Lanka is a good place to look!
@Amar Acharjee: as I mention in the article above, it will be a challenge for Canada Carbon to produce a mineral resource estimate, but not impossible. It remains to be seen how they approach it.
@pansy: I don’t disagree – establishing the quantity of material at the Miller site will be important going forward.
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