In March 2016 I had the opportunity to visit a leading North American research and development company, focused on materials and components relating to energy-storage devices. I was invited to visit the facility by Alabama Graphite Corp (AGC) (TSX.V:ALP, OTCQX:ABGPF), to see how AGC’s development of coated spherical purified graphite (CSPG) is progressing, and to get a better understanding of the battery prototyping and production processes.

For competitiveness reasons, the invitation was issued with the proviso that I not identify the company that I visited, or the personnel that I interviewed, under the terms of a strict non-disclosure agreement. The company (which I will call EngineeringCo for the purposes of this article) assists a number of players in the critical-materials space with the development of value-added processes, with particular expertise in Li-ion batteries (LIBs). EngineeringCo was at pains to make sure that the only work that I saw during the visit, pertained to processes and components relating to and produced from, AGC natural-flake graphite.

I was able to take a number of photographs during my visit, which are included below (click on the thumbnails to enlarge the images). Also included is a separator / electrode cross-section schematic, and other images produced by EngineeringCo and AGC that were verified during my visit.

Nevertheless, I had the opportunity to discuss a number of topics of wider interest to the use of natural graphite in LIBs with a senior scientist at EngineeringCo (whom I will call Dr. X), who is well known by many in the graphite industry and beyond, for his experience and expertise in the processing of graphite, anode production for LIBs and LIB prototyping and validation.

Regardless of the ultimate application, the early stages of natural-graphite processing are generally the same. The graphite ore is mined or excavated, and then crushed so that the contained graphite flakes can then be concentrated, via flotation. The crushed ore is typically placed into water with an additive such as pine oil or kerosene, which creates a thin film on the surface of the water. Graphite flakes are hydrophobic and lighter-weight, and being repelled by the water they remain at the surface, while the heavier rock matter simply falls to the bottom of the flotation cell. The result of these and associated processes is run-of-mine (ROM) concentrate, and historically has been the goal of most graphite juniors, looking to produce a saleable material as a result of their endeavors.

More recently, companies like AGC have realized that the way to maximize the value of their graphite ores is to apply secondary processes to this ROM concentrate, with the goal of producing so-called battery-grade graphite for LIBs. These secondary processes include purification, micronizing, spheroidizing and coating, to produce CSPG, a high-value graphite product that can be used for the anodes in LIBs. Each of these steps requires careful optimization, with the process parameters being tailored to the unique characteristics of each specific ROM concentrate.

I asked Dr. X why companies choose a particular order for completing the secondary processes of purification, micronizing, spheroidizing and coating ROM concentrate, for battery-grade materials. Not unsurprisingly, he commented that it boils down to economics. In the past, graphite mines would generally categorize their ROM concentrate into two broad categories; coarse flakes (+80 mesh / +180 µm) would be sold into higher-end applications (such as graphite crucibles, extruded shapes and steelmaking), whereas the finer material was only given secondary consideration, for use in pencils and other applications (such as powdered metallurgy, composite brake pads, forensic dispersions, zinc-carbon ‘lantern’ batteries, dry lm and liquid lubricants, and the like).

When first commercialized over 25 years ago, LIBs utilized anode-active materials comprised of mesophase carbon microbeads (MCMBs), produced via an expensive process by a single Japanese company, Osaka Gas Co. Osaka Gas was not able to reduce the cost of MCMB synthesis, in the face of LIBs becoming commodity devices, requiring commodity pricing on all of the materials and sub-components used to manufacture them. MCMBs soon lost their dominant market share to graphitized chopped carbon fibers (GCCFs), produced by Toshiba, BP Amoco and other companies.

The increasing demand for LIBs put further pressure on the anode-material producers and GCCFs were in turn superseded by two materials: graphitized, surface-coated synthetic graphite, and surface-coated natural purified flake graphite. Today, battery manufacturers increasingly favor the replacement of synthetic graphite with natural graphite in anodes for LIBs, for a number of reasons:

• The carbon-based precursor materials for the synthetic route have to be graphitized through a costly heat-treatment process. Since natural graphite is already graphitic in nature, it is an inherently lower-cost material to produce;
• LIB anodes require high-purity, spheroidal particles with sizes in the range of 10-25 µm. Synthetic graphite, once graphitized, is generally brittle and more resistant to processing, in contrast to natural graphite, which is more lubricious and amenable to such processing. This means that natural graphite is significantly easier to spheroidize than synthetic graphite (with some observers arguing that synthetic graphite cannot actually be spheroidized at all). Spheroidal particles are preferred as they contribute to maximizing the overall energy density value of the battery (more on this, later in this article);
• Most premium-quality natural crystalline flake graphite exhibits superior performance to synthetic graphite. For example, CSPG produced from AGC’s Coosa graphite deposit, with a particle size of D50 = 18.3 µm has a reversible capacity (the energy capacity that can be consistently and reversibly achieved upon cycling) of 367.21 mAh/g, just shy of the theoretical maximum of 372 mAh/g. In contrast, one of the industry’s best commercial synthetic graphite products with a particle size of D50 = 15.8 µm, has a noticeably lower reversible capacity of 347.2 mAh/g. More on these values, later in this article;

Typically the larger the flake size, the higher the purity of the untreated graphite, which resulted in the initial recent industry emphasis on the proportion of large-flake graphite in any given deposit (the more, the better, went the mantra). What this focus missed, however, is the fact that the process of converting large flakes into smaller particles of a suitable size for anode production, is expensive because any additional grinding is energy intensive, adding additional cost to processing. Indeed, the larger the flake size, the more energy is required for this size-reduction process.

If instead, the process began with smaller flake sizes, and the purity of these materials could be improved through low-cost purification techniques, finer flake material would become particularly attractive for producing battery-grade graphite, and in fact more cost effective than starting with large-flake material. Deposits would not require significant proportions of large-flake graphite to be suitable for battery-grade graphite production; having larger proportions of finer flake material could in fact be an economic advantage.

This latter approach is the one that AGC has taken with its ROM concentrate. Dr. X pointed out that the flake sizes in AGC’s Coosa graphite deposit are fairly evenly distributed. Instead of trying to convert all of this material into battery-grade graphite, a simple screening filter could separate the ROM concentrate into -100 mesh / -150 µm flake, for battery applications, with the remaining +100 mesh / +150 µm particles for traditional higher-end applications. Further screening to produce +80 mesh / +180 µm, +50 mesh / +300 µm and +32 mesh / +500 µm fractions could be applied, to further differentiate the coarse-flake material for specific end-use applications.

Battery-grade graphite requires high purity for effective operation. Traditional purification processes include baking the graphite with sodium hydroxide, and the acid-leaching approach, widely used in China, to dissolve the impurities out of the graphite. In the acid-leaching process, the ROM concentrate is immersed in a mixture of hydrochloric and hydrofluoric acids. The hydrochloric acid removes oxides present as soluble chlorides, but does not react with the silica impurities that remain. Hydrofluoric acid is needed to remove the silica, in the form of soluble fluorosilicic acid. This results in large amounts of acid washings; in China these are typically not neutralized or treated but are often simply flushed into local waterways, causing damage and pollution to local aquifers and wells.

While chlorides are not noxious, the fluorides produced, at the concentrations resulting from this process, are particularly toxic. While the cost of the acids used in the acid-leach process are relatively cheap (USD 300-350 / t of graphite purified), such costs do not take into account the cost of the treatment of the waste streams that would be required of any processing plant located in a Western jurisdiction, which according to AGC may be as high as USD 5-7k / t of graphite treated, using reverse osmosis. Clearly then, the acid-leach process is unlikely to be a cost-effective approach for any environmentally responsible graphite purification plant.

Another method is a variation of the Acheson process (originally used to produce silicon carbide and synthetic graphite), which involves the placement of large quantities of ROM concentrate and coke into a pit in the ground, and running high electrical current through it via two electrodes. The high electrical resistance of the mixture causes it to heat up quickly, producing a chemical reaction that results in relatively pure graphite. Operating temperatures are in the range of 2,800-3,000 °C. The presence of fine-flaked material in such a process is potentially dangerous because of the risk of combustion. Thus the graphite has to be pelletized prior to purification, with these pellets being re-crushed afterwards, before being further processed. However, the smaller the starting flake size, the more difficult and expensive it is to pelletize the material.

Other methods include the use of fluidized-bed technology, where the graphite is continuously fed into a reaction chamber and subject to a stream of inert gas at high temperature, which causes the impurities to volatilize (convert into gaseous mists) and to be removed from the graphite, which eventually burns off (and partially settles) in the off-gas chamber / neutralization process. The removed impurities are captured via scrubbers and turned into benign products such as gypsum.

The aforementioned thermal process is typically run at 2,400-2,600 °C – higher than the volatilization temperature of the impurities found within the graphite. Such high temperatures require significant energy consumption and are thus relatively expensive.

Using a process that eliminates the need to pelletize, can be run at lower temperatures, and which avoids the pollution associated with acid leaching, is therefore essential to the cost-effective purification of finer-flake graphite.

Although EngineeringCo has access to lower-cost purification processes that are suitable for finer-flake materials, AGC had already turned to another North American company (which we’ll call PurificationCo here – again, their identity is confidential) to work on this challenge for their material. I have previously visited the facilities of PurificationCo, and had the opportunity to discuss the purification process developed for AGC, with senior staff at PurificationCo, after my visit to EngineeringCo.

According to PurificationCo, the purification process for AGC material is essentially a halogenation process, where chlorine gas is used to convert the impurities to volatile chlorides. With an appropriate system design, the chlorine gas can be recycled, resulting in a relatively inexpensive process. The process is the standard process for purification of titanium dioxide to make paint pigments, with production in 2015 of about 3 Mt of titanium dioxide. The process runs at significantly lower temperatures than those of fluidized-bed processing – resulting in significant energy cost savings.

The surface area of finer graphite flakes is higher than for coarse-flake material, and much higher than graphite pellets, and this is advantageous for a process of this type because it makes it easier for the chlorine to diffuse into the graphite particles, and to react with the impurities present.

Dr. X commented that the graphite purity obtained during the purification step must be higher than the minimum purification specification for the battery-grade graphite at 99.95 wt% C. This was confirmed by PurificationCo.

This is because there are a number of post-purification processing steps required to produce such materials. Despite efforts such as air purification and other measures, each processing step has the potential to cause minor contamination in the material, at the parts-per-million (ppm) level. For this reason, the purification process produces a 99.98%+ purity graphite, higher than the final purity specification of 99.95%+ for the finished products.

I asked Dr. X how graphite purity is actually measured. He said that a carefully measured sample of a given graphite product is placed into a low-profile ceramic crucible, loaded in a small muffle furnace, where it reacts with oxygen. This reaction produces carbon dioxide which evolves as a gas. What remains is a tiny quantity of ash which contains the non-carbon content of the graphite. This ash is then weighed and analyzed for content, to determine the purity of the original graphite.

Interestingly Dr. X commented that this process can be used to identify the source of the graphite being tested, since each deposit has a characteristic distribution of impurities. Image analysis of the ash under magnification, combined with computerized statistical analysis, allows EngineeringCo to compare a given sample with a large database of previous samples. This is a useful tool for verifying the source of materials, for buyers and end users. The company also uses atomic-absorption spectroscopy to check the elemental content of the ash, for the presence of some 19 specific elements that are particularly problematic for battery operation, if found at elevated levels in the graphite. Full-blown chemical analyses can also be conducted using standard ICP analysis.

After purification, the next process step for the AGC material is to micronize it – to reduce the average particle size to some value within the 10-25 µm range that is optimal for anodes (the specific value will depend on customer requirements). This is achieved using jet milling, where the graphite flakes are drawn into streams of high-velocity gases that cause the flakes to collide with each other and to break apart, reducing their size to the target value. The EngineeringCo folks showed me how the process is controlled by altering the duration, the gas pressure and velocity in the system, and the mass of flake material processed at any one time. Small test batches are always done before processing bulk materials, since different graphite sources can exhibit different properties during the jet-milling process. Note, micronization may also be performed before spheroidization – and, in some cases, may be required, depending on the graphite material.

Before and after milling, the particle-size distribution of the graphite powders needs to be measured, so that the appropriate set of parameters to achieve the target size value can be determined, and to ensure that the jet-milling process has been effective. This is determined using a device that passes a laser through the powder, mixed with water with the addition of a detergent. The laser light will scatter as a result of its interaction with the particles, and the distribution of particle sizes can thus be determined, via a histogram plot. Cumulative volumes are also plotted against particle diameter, on the same chart.

The cumulative volume allows the operator to determine the ‘D values’ for the sample – essentially the range of particles sizes, and an average value. The particles are modeled as equivalent spheres in the system. The D10 value corresponds to the diameter of the equivalent sphere, at which 10% of the sample consists of smaller particles. D50 is the median diameter – the diameter at which half the sample consists of smaller particles. D90 is the point at which 90% of the sample consists of smaller particles. The D10 and D90 values represent a particular range of diameter values, with the D50 value representing the average particle size. All three values are useful in specifying the characteristics of a given powder.

Once milling is complete, the resulting powder is then classified into precise particle-size-based fractions of the overall material.

The next step in the process is spheroidization – converting the graphite particles into rounded, potato-like shapes. The closer the particles are to being spherical in shape, the greater the performance of the anode in the battery. Why is this?

It has long been proven by mathematicians that the most effective way to randomly pack as many particles into a given volume as possible, is if the particles within that volume are perfect spheres. If arranged carefully, then in any given volume the maximum theoretical space that can be taken up by the spheres, is 74% of the overall volume. For randomly packed spheres, this maximum drops to just below 64%. The further away a particle is from being spherical in shape, the less efficient is the random packing of those particles into a given volume. Spiky or needle-shaped particles, for example, when packed randomly, have an efficiency of packing somewhere in the region of 30% – significantly less than that for spheres.

So why do we care? Because the anode density – the amount of actual graphite that can be packed into a given volume – directly affects the energy density of the battery. This is the amount of energy that can be stored in the battery, per unit volume of graphite (measured in Wh/l). The denser the graphite anode, the greater the energy density on a full cell level.

Dr. X commented that this is one reason why synthetic graphite for graphite anodes is so expensive, because as produced, the particles tend to be long and thin. Even the best efforts to produce spheroidized graphite from synthetic graphite result in lower capacities per unit of battery volume, because they are ultimately less spheroidal. The conversion of these needle-like shapes into spheroidal particles is more energy intensive than for natural-flake graphite, and with lower yields.

Synthetic graphite can also see lower graphitic carbon content than natural graphite. The latter affects that critical parameter of any battery anode, its reversible capacity.

As previously mentioned, the theoretical maximum reversible capacity for graphite anodes is 372 mAh / g. EngineeringCo has measured values of 367.21 mAh / g for anodes produced from AGC graphite. This compares to values of 290-330 mAh / g for typical synthetic graphite, and 340-350 mAh / g for the best anodes produced from premium-quality synthetic graphite.

Needle-like particles are also undesirable because they have a tendency to break into small pieces during processing, and if still present, those pieces may diffuse in the electrolyte during operation, to the cathode, potentially causing a short circuit. Even if this can be avoided, these pieces may absorb electrolyte, impairing the capacity of the battery because of first-cycle losses (chemical reactions at the interface of the anode during the first charge/ discharge cycle).

EngineeringCo uses a highly proprietary spheroidizing process for the AGC materials, causing the particles to smooth each other through collisions that eventually result in the desired spheroidal shape. Sharp edges present in the original flakes are broken off and are redeposited onto the surface of the spheroids. The subsequent yield of the process, according to Dr. X, is 75%+, compared to the typical yields of processes undertaken in China at 20-30%. The cost benefit of such yield improvements are self-evident, if they can be scaled.

Furthermore, the remaining 25% of non-spheroidized graphite, with a typical particle D50 of 3-10 µm, can be used as conductivity-enhancement additives in the battery cathodes. Dr. X commented that junior graphite companies generally have little appreciation for the opportunities relating to cathodes, in addition to battery anodes. Premium-performance conductivity-enhancement materials are typically worth in the region of USD 15-20k / t – significantly higher than the USD 12-14k / t that spheroidal graphite produced from natural graphite can command. These materials could also be used in the production of alkaline and zinc-air batteries, conductive paints and coatings, to name a few markets.

Ultimately the performance of the graphite, once produced, is related as previously stated, to its density in the anode. Tap density is frequently used to describe this parameter – calculated by mechanically tapping a graduated cylinder containing graphite material, until little further volume change is observed. EngineeringCo uses autotap machines to determine tap density, by recording the height of material in a container, and its mass.

Dr. X argues that a more useful parameter is the bulk density of the material, because when used to produce anodes, the graphite particles are free flowing, and are not tapped. The bulk density is the ratio of the sample mass to the volume that it occupies (including gaps between the particles), without being tapped. It is measured using a Scott volumeter. This uses a receptacle of known volume and mass, into which graphite is poured through a funnel that sits on a baffle assembly. As the graphite pours through the baffles, it fills the receptacle until it overflows. The powder is leveled off using a flat edge and then the cup is re-weighed, to determine the mass of graphite and thus the bulk density, since the volume is known.

The bulk density needs to be as high as possible because the battery anode is produced using a painting process, and is not pressed or otherwise ‘tapped’ – thus requiring particles to be as close to spherical as possible, as previously explained, for space-packing reasons. More on that process, later in this article.

Once spheroidized, the graphite particles need to be classified by size and then coated. There are a couple of important reasons for this. The first is to improve the safety of battery operation. As mentioned previously, if there are any sharp edges left at the surface of the graphite particles prior to anode formation, these may break off and diffuse to the cathode during operation, increasing the chances of a short circuit in the system at the cathode, leading to thermal runaway. ‘Smearing’ the particle surface during spheroidizing and then adding a coating reduces the probability of these sharp pieces breaking off the graphite particles in the anode, during operation.

The second reason is to reduce problems at the surface-electrolyte interface (SEI) in the anode, that result in first-cycle losses. During the first cycle in the battery, a foam layer can build up at the SEI which can reduce the reversible capacity of the battery during subsequent charge / discharge cycles. Again, the presence of small pieces of graphite can increase the thickness of this SEI layer and coating the particles helps to reduce it, by decreasing the Brunauer, Emmett, and Teller (BET) parameter for the particles. This is a measure of the effective surface area of the particles; the higher the BET surface area value, the greater the probability of sharp surfaces being present on the particles.

EngineeringCo uses a proprietary method for applying a 10 nm carbon-based coating on each of the particles, which is subsequently cured to polymerize the coating at the surface. The coating provides continuous coverage of each particle to reduce the BET surface area, while at the same time allowing the Li⁺ ions in the electrolyte to pass through small pores or channels, to contact the surface of the graphite particles in the anode. Larger molecules (such as the small pieces of graphite previously mentioned) are prevented from getting through. The ability to protect the surface of the anode without impeding the flow of Li⁺ ions is crucial for effective battery operation, and the proprietary coating allows this to happen.

The coating process is the final step in the production of the CSPG material, and the graphite is then ready to be used in the production of anodes for LIB testing.

All battery prototypes at EngineeringCo are individually produced, in either button (CR2016 or CR2032) or cylindrical (AA, 18650 or 32650) form factors, depending on the particular goals of the project. Putting together the batteries is undertaken in an argon glove box, because of the reactivity of the Li-ion electrolyte in the air. Dr. X indicated that in commercial facilities, the construction of batteries is undertaken in dry rooms which have a special atmosphere called ‘dry air’, which can be breathed by the workers in them, but which prevents the oxidation of the Li-ion electrolyte and other compounds used in battery construction.

For the cylindrical batteries, the anode, separator, and cathode components are wound together in a spiral, before being placed inside a cylinder. The anode is produced from a long strip of copper foil, typically 10 µm thick, which is coated on both sides with a paint of CSPG particles, each layer being approximately 45 µm thick. The cathode is produced from a long strip of aluminum foil, typically 20 µm thick, which is coated on both sides with a paint of one of several metal-oxide compounds, such as lithium cobalt oxide, lithium iron phosphate, lithium manganate, or lithium nickel manganese cobalt, depending on the battery configuration to be tested. These cathode layers are approximately 90 µn;m thick.

Mixed in with this cathode metal-oxide powder is approximately 8 wt% of the conductivity-enhancement additives previously mentioned, that is typically equal parts carbon black and graphite. Such additives are always included in the cathode formulations. Typically, synthetic graphite is used, though as Dr. X commented previously, there is an opportunity to use the natural graphite that remains after spheroidizing, in this additive. The additive is required to improve the conductivity of the cathode during operation, as well as to control the viscosity of the paint when it is being applied to the foil. The graphite here therefore has a different function that the graphite being used in the anode. The aluminum foil used in the commercial production of cathodes may also be coated with carbon.

In between the anode and cathode strips is a 20-25 µm thick separator strip, typically produced from an ultra-high-molecular-weight polypropylene or polyethylene film, which has a controlled level of porosity. This gives some ‘space’ for the electrolyte between the two electrodes. The overall thickness of the anode component is approximately 100 µm, whereas the cathode strip is typically 190-200 µm thick. The difference in thickness is a result of the different reversible capacities of the materials used in the anodes, with the best cathode materials having values that are less than half that for natural-graphite anodes. Therefore, the cathode thickness is approximately double that of the anode, to balance the electrochemistry of the system, during operation. The diagram included in the images below shows a schematic of the anode / cathode / separator arrangement inside the battery.

Once the spiral has been wound and placed in the cylinder, the electrolyte is added, and the cylinder is sealed via either crimping or laser welding. Button-shaped battery prototypes use disks instead of spirals inside the container, though the configuration is effectively the same as for the spiral systems. The batteries are then ready to undergo proprietary formation, followed by testing, which involves repeated charging and discharging of the batteries, to determine the first-cycle losses, reversible capacity, and any changes in characteristics over time.

By the time of my visit, EngineeringCo had previously processed over 10 kg of AGC graphite material into CSPG material, and produced at least 50 batteries from it. Multiple prototypes and tests are required to establish representative performance metrics for the batteries, and the graphite contained within them.

The visit to EngineeringCo was very enlightening and it was a great opportunity to see the operations used to produce CSPG materials from AGC’s graphite, and the process of testing and evaluating such materials in actual battery prototypes. My thanks go to EngineeringCo, Dr. X and his colleagues for hosting me, PurificationCo and to Alabama Graphite Corp. for the invitation to see these processes in action.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Alabama Graphite Corp. (“AGC”). Neither he nor Technology Metals Research, LLC received compensation from AGC or from anyone else, in return for the writing of this article.

In October 2015 I paid a visit to the Coosa graphite project in the USA, being developed by Alabama Graphite Corp. (TSX.V:ALP, OTCQX:ABGPF) in Coosa County, Alabama.

Located in a past-producing region of the state known as the Alabama Graphite Belt, the Coosa project is approximately 50 miles south-southeast of Birmingham and 20 miles north of Montgomery. The project is also 30 miles northeast of the Bama Mine project, also owned by Alabama Graphite Corp (AGC).

20 miles to the northeast, AGC has its field office and core storage facility in Sylacauga, which I also had the chance to visit. Sylacauga is home to the world’s largest marble quarry, and the source of the pure, white marble used in the construction of many famous buildings and memorials in the USA, including the US Supreme Court building, the US Capitol rotunda and the Lincoln Memorial in Washington, DC.

I was hosted during my visit by Don Baxter, President & CEO of AGC, Rick Keevil, VP for Project Development and Jesse Edmondson, Project Geologist for Coosa and also Director of Community Relations.

Per the October 2015 NI 43-101 guided mineral-resource estimate for the Coosa deposit, at a 1% graphitic carbon (Cg) cut-off grade, 78.5 megatonnes (Mt) of the resource is at the Indicated level @ 2.39% Cg and 79.4 Mt is at the Inferred level @ 2.56% Cg. This results in an estimated 3.9 Mt of Cg present in the mineral resource at Coosa. The resource estimate was based on the results of 109 drill holes totaling 7,900 m (25,900 feet) and 9 trenches totaling 1,150 m (3,800 feet).

Graphite development companies typically report on the distribution of flakes sizes in their graphite deposits. Metallurgical results announced by the company in May 2015, and subsequently reported in the PEA report indicate that approximately 25-30% of the graphite present at Coosa is in the form of large flakes (+80 mesh or >180 μm). However, as we will see later in this article, AGC’s intended approach to production potentially negates the need for significant quantities of large-flake graphite to be present in the deposit, since the company’s plan is to process graphite across the range of flake sizes, into higher-value engineered graphite products.

You can see photographs taken during the visit in the galleries below (click on each image to enlarge it).

The name of the Coosa project has its roots in the local history of the area. Historically Coosa was a Native American province which included parts of present-day Alabama, Georgia, Tennessee, and South Carolina. This province gave its name to the Coosa River, which flows at the western boundary of Coosa County. The area is situated towards the southern end of the Appalachian mountain range, in the Northern Piedmont geological province.

AGC holds the mineral rights to a total of 17,000 ha (42,000 acres) of land at and around the Coosa project location. Mr. Baxter indicated that the surface rights for the Coosa Project are owned by a timber company, and are currently leased by AGC for exploration use. He commented that AGC has an excellent working relationship with this timber company and that they are supportive of the project’s continued development.

The host formation for the Coosa deposit consists primarily of schists, including quartz-muscovite-biotite-graphite schist, quartz-graphite schist, quartz-biotite-garnet schist and combinations of these. Schists are medium- to coarse-grained rocks, formed through the metamorphosis of shale or igneous rocks. The resulting foliation, or planes of weakness in the rock, makes it relatively straightforward to break up these materials for processing. Mr. Baxter commented that the quartz and other waste minerals that will result from processing these schists, could potentially be sold and used for a variety of end uses, including the production of roof shingles and the like.

Although the project location is rural, the Coosa project is well served by local roads, with interstate highway 65 less than 5 miles from the property. Coosa is close to other local infrastructure, with the nearest town just 5 minutes away from the site.

Mr. Keevil explained that the top 20-30 m (60-100 feet) of the graphite-bearing material at the Coosa deposit has been oxidized and weathered over time, resulting in a very soft rock that is easy to excavate and to process. This was confirmed during the site visit, with on-site sample materials easily crushable by hand. This weathered layer means that for a significant portion of the mine life, no drilling or blasting will be required to obtain the graphite ore; instead simple excavating equipment will be used in an open pit to get at the materials.

With one or two exceptions, junior-mining companies looking to develop graphite projects typically focus on the production of run-of-mine (ROM) concentrates, produced by beneficiating graphite ores using standard processes such as crushing, milling and flotation. ROM concentrates are typically sold directly to end-users in a number of sectors. Given the relatively low value of such materials, projects focused on ROM concentrates likely need to have high head grades in their graphite deposits, to reduce the costs of ROM concentrate production and to generate reasonable margins.

The path to greater revenues (and margins) for any future graphite producer lies in upgrading the ROM concentrate, preferably in-house, so that it can be used to produce the anodes for lithium-ion batteries (LIBs). Battery-grade graphite requires particularly high purity levels, typically greater than 99.9% Cg.

Mr. Baxter explained that the AGC business model is focused on the production of highly engineered graphite, mostly for the production of LIB anodes. Recent initiatives by Tesla Motors and others to produce large quantities of LIBs for electric vehicles and home energy storage, will require significant quantities of graphite to meet demand. In keeping with the ‘green’ credentials of such end users, such graphite will need to be produced in jurisdictions that mandate a significant degree of environmental protection, with respect to the methods used to produce engineered graphite products.

During battery operation, in order for the lithium ions in the LIB electrolyte to efficiently diffuse between graphite particles within the anodes, the particles need to be small, and this is achieved through micronization of the precursor graphite powders. Standard battery-grade graphite requires an average diameter of approximately 10-30 μm.

Such materials also need to be spheroidized – increasing the packing or ‘tap’ density of graphite particles by converting the naturally flat graphite flakes into potato-like shapes. The combination of high purity and tap density enhances the electrical conductivity of the graphite anodes, during use in the LIB.

Conventional wisdom for battery-grade graphite developers, has been to focus on graphite deposits that contain significant proportions of large (>150 μm) graphite flakes, because the purity of the graphite flakes tends to increase with flake size. However, given the additional energy costs required to micronize large flakes, the ideal precursor material would have small flake size, if it had sufficient purity levels (either as-is or through a cost-effective purification process) for the subsequent processing to be economically viable, and if it can be effectively spheroidized.

In addition to micronizing and spheroidizing high-purity graphite, battery-grade powders also need for the individual particles to be coated, typically using a non-graphitic carbon material, to reduce the specific surface area of the powder. Lowering the specific surface area increases the ability of the anode to operate efficiently in the battery in which it will operate, increasing the useful life of the battery. Just as important, it reduces the risk of a runaway chemical reaction, which could lead to a dangerous situation in usage.

Since Mr. Baxter joined the company in June 2015, AGC has transitioned its business model from that of a potential purveyor of ROM concentrates, to a potential producer of high-purity, engineered graphite. Per the Preliminary Economic Assessment (PEA) for the Coosa project, published in November 2015, AGC intends for 75% of its annual production of graphite to be in the form of coated spherical purified graphite (CSPG), for use in battery anodes, with the remaining 25% of production being sold as purified micronized graphite (PMG), for use in a variety of non-battery applications such as powder metallurgy, friction materials, and polymer, plastic and rubber composites.

Mr. Baxter indicated that the proportions of graphite going into each of the two products is related to the particle sizes that result from micronizing and spheroidizing the graphite flake, which has first been subject to a purification step. Particles with resulting sizes >10 μm are converted to CSPG via surfacing coating, and have typical Cg purities of 99.95%+. The remaining particles, with sizes <10 μm will be sold as PMG materials, and have typical Cg purities of 98%+.

The Coosa PEA assumes a 27-year mine life (mining 10% of the mineral resource estimate and focused only on the oxidized top layer of material), and that production at Coosa will start at 5,000 t / year for five years, rising to 15,000 t / year by year 7. It is further assumed that the capital costs associated with such an expansion, are funded from the free cash flow produced in the initial production period. At an 8% discount rate, this results in a pre-tax Net Present Value (NPV) of $444M or $320M post-tax (all $ in USD), and an Internal Rate of Return of 52.2% pre-tax (45.7% post-tax).

I asked Mr. Baxter how these numbers would look if the expansion did not take place (i.e. if the 5,000 t / year production rate was constant throughout the life of the mine). Such a scenario results in an NPV of $157M pre-tax ($120M post-tax) at an 8% discount rate and an IRR of 47.8% pre-tax (42.4% post-tax).

The PEA assumes that CSPG can be sold for $9,000 / t, with PMG fetching $2,000 / t. These prices are based on estimates from Benchmark Mineral Intelligence of current selling prices of $7,000-12,000 / t and $1,800-2,800 / t for CSPG and PMG products respectively.

The PEA also states an estimated operating cost over the 27-year mine life of $1,555 / t. This is a blended operating cost, covering the combined cost of production of CSPG and PMG. If accurate, these numbers would provide AGC with significant margins for its two product lines, particularly the CSPG material.

So on what basis does AGC believe that it can actually and economically produce these engineered graphite products? The company has been testing a number of processes for the purification, micronizing and spheroidizing of its graphite flake in recent months.

In September 2015, AGC announced that 99.99% Cg purities had been obtained across the full range of flake-size distributions. A conventional low-temperature thermal purification process, using chlorination, was applied by an unnamed metallurgical laboratory to graphite concentrates produced by SGS Mineral Services of Lakefield, Ontario. Recoveries of 90%+ following purification were obtained.

This announcement followed on the heels of the initiation of a pilot plant program at SGS, for the processing of a 200 t bulk sample into graphite concentrate. Mr. Edmondson said that the bulk sample came from a total of 10 pits, each providing approximately 20 t to the sample. The pits were evenly distributed across the Indicated mineral-resource area of the property, to represent the variations in grade, flake size and rock type typical to the deposit.

During my visit, Mr. Baxter indicated that tests of micronization and spheroidization processes for the purified Coosa graphite were underway. These processes were hinted at in the PEA report; a news release from the company issued in January 2016, detailed the results of downstream independent LIB tests using graphite anodes produced from Coosa CSPG materials.

The results announced in last month’s news release indicate that AGC’s micronizing, spheroidizing and coating processes were apparently successful. A tap density of 0.985 g / cm³ was achieved (anode production typically requires a minimum tap density of 0.9 g / cm³), along with a desirably low specific surface area, relative to the commercial LIBs tested.

A reversible capacity of 367.21 mAh/g and irreversible capacity loss of 5.09% were obtained for the AGC batteries, compared to 347.2 mAh/g and 6.06% respectively.

If these results can be replicated at the demo and subsequent commercial scales, AGC will have demonstrated the ability to effectively produce CSPG suitable for commercial-grade LIB graphite anodes.

During my visit to Alabama, I asked Mr. Baxter about a couple of news releases issued by AGC earlier in the year, concerning the apparent occurrence of ‘naturally occurring graphene’ at the Coosa project site. He said that samples from the Coosa site had been analyzed at the University of Alabama, and graphene with 2-10 layers had been observed. Analysis was also performed at Queens University in Kingston, Ontario, which apparently observed the graphene layers in samples obtained from the rougher flotation process applied to bulk samples of Coosa materials.

Mr. Baxter described these initial findings (announced prior to his taking the helm at AGC last year) as “interesting but somewhat academic” at this stage. The presence of multi-layer graphene, if confirmed, may indicate that the graphite present at Coosa may be more susceptible to delamination, which if the case, would present the possibility of the use of shearing during processing. However Mr. Baxter noted that AGC was firmly focused on the production of engineered graphite for battery and other applications, and not on graphene production. This was recently reiterated in AGC’s January 2016 Corporate Update, confirming that AGC has no intentions of getting into “the graphene business”.

Mr. Edmondson commented that because the Coosa project is located on private land, permitting for the project will rest at the state level, which should provide a relatively straightforward process when compared to mining projects on Federal or Crown land, elsewhere in North America. The company anticipates that the entire permitting process will require approximately six to eight months for completion. There is significant local and state-level support for the Coosa project, given the number of potential jobs that would be created from the project. The proximity to the Sylacauga marble mine means that there are significant numbers of skilled workers in the area; labor costs are relatively low in Alabama.

AGC is keen to stress its “Made in USA” credentials for a future Coosa mine; Mr. Baxter commented that the proximity of the project to current and future battery manufacturers in the USA, should give the company a key advantage in servicing such potential customers, over other projects located further afield. The company also highlights the Alabama connection on its Web site and presentations, tying in to the state’s own “Made in Alabama” campaign and the apparent advantages that this might have.

Commenting on the future mine design for Coosa, Mr. Baxter said that a goal will be for zero discharge of wastes from the mine. The site will incorporate a number of sedimentation ponds and dry-stack tailings, where waste products will be stored after thickening. All water used for processing will be recycled, with small amounts of ‘make-up’ water used if needed.

The weather in Alabama is such that winterizing of buildings on the future mine and processing site will not be required.

The initial processing mill will be located on-site at the Coosa project. The plant for purification and further processing of the mined graphite will be located approximately 20 miles from Coosa in Rockford, Alabama, to which there is direct access from the Coosa site along county roads. An existing natural-gas pipeline runs through Rockford. The proximity of this pipeline will be beneficial to the capital and operational expenditures, associated with the furnaces needed for the processing facility in Rockford.

After visiting the Coosa project site, talking with AGC management and reviewing the recent announcements from the company concerning its battery-grade pilot-plant work, I believe that AGC’s Coosa project is on a sound technical footing. The decision to go beyond the production of ROM graphite concentrate, in order to provide a ‘one-stop shop’ for its customers will serve the company well, if the price forecasts and actual operational costs are consistent with the PEA estimates. Combined with relatively modest initial production targets, AGC has a sensible and credible business model.

My thanks go to the AGC team for organizing the logistics of my visit, and to Don Baxter, Rick Keevil and Jesse Edmondson for hosting me during my time in Alabama.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Alabama Graphite Corp (AGC). Neither he nor Technology Metals Research, LLC received compensation from AGC or from anyone else, in return for the writing of this article.

CARPENTERSVILLE, IL – June 4, 2014 – A team led by Technology Metals Research, LLC (TMR) has been awarded $1.2M in funding from the US Army Research Laboratory (ARL), part of the US Department of Defense (DOD), via a subaward agreement with Worcester Polytechnic Institute.

The project, involving a dozen companies and research institutions in the United States, Canada and Australia, will focus on the development of the key components for a domestic rare-earth supply chain, for heavy and other critical rare-earth elements (REEs).

REEs are vital ingredients in many high-tech components used in defense, industrial and green-energy applications. In recent years the REE sector has been dominated by China, which provides approximately 90% of global supply. The heavy REEs dysprosium and yttrium were recently mandated for inclusion in the DOD’s National Defense Stockpile, despite not presently being produced in the USA, from US-based sources.

Project partners include Innovation Metals Corp. (IMC) and researchers at Argonne National Laboratory, the University of Illinois at Chicago, the University of South Australia and the ARL itself. A number of ‘stealth-mode’ companies and researchers with promising new technologies will also participate in the program.

“As well as validating IMC’s process-flow diagrams for the bulk solvent extraction of heavy and critical REEs,” said Gareth Hatch, co-founder of TMR, President of IMC and the Principal Investigator for the 12-month program, “this award from the ARL will allow the team to evaluate new process technologies that have the potential to revolutionize the speed and efficiency of REE extraction and separation. These are exciting, materials-science-based approaches that have not been seen by the rare-earth sector before.”

In addition to process development and validation, TMR will work with leading REE geologists and mineralogists to characterize promising sources of critical REEs in the continental United States, beyond those currently being commercialized. The company will also look at the development and validation of computer simulation tools, for the accurate modeling and rapid optimization of existing and new REE separation processes.

“We’re very interested in the possibilities that the TMR-led project will bring to the rare-earth supply chain,” commented Dan McGroarty, President of the Washington, D.C.-based American Resources Policy Network. “The program has the potential to advance the development of a robust domestic production capability for critical REEs that is ultimately accessible to the DOD, the defense supply chain and beyond. The program activities constitute a unique, vertical approach – across every point on the supply chain from the supply to demand-side, from extraction through separation to end-users – addressing the issue of U.S. dependence on foreign-controlled entities for critical REE processing and production.”

“Private capital has made extraordinary investments in the rare-earth supply chain over the past few years,” added Jeff Green, Executive Director of the Strategic Materials Advisory Council (SMAC), “but absolutely critical gaps in the US supply chain remain — gaps that would seriously undermine the defense industrial base and essential civilian programs during a peacetime supply disruption or contingency scenario.” Mr. Green continued, “The fact that the ARL is pursuing this project with industry leaders like TMR shows exactly how serious they are about this issue. It is a most welcome first step in re-shoring the current state-of-the-art while fostering the next generation of rare-earth innovators in the United States. The SMAC is proud of the efforts by Council Member Dr. Hatch and applauds the Army and the DOD for its leadership.”

In addition to coordinating the existing program activities, TMR remains open to looking at additional processes and to collaborations with other groups, which could contribute to the overall objectives of the project.

About Technology Metals Research, LLC
Technology Metals Research, LLC (TMR) is an independent market-intelligence and analysis firm, focused on rare earths and other critical and strategic materials. TMR provides research management, due-diligence assistance, and other advisory services to public and private companies, institutional investors, government agencies and other market-intelligence firms.

Forward-Looking Statements
This news release contains statements that may constitute “forward-looking statements” within the meaning of applicable United States laws. Forward-looking statements may include statements regarding the future plans, objectives or performance of Technology Metals Research, LLC (“TMR”), or the assumptions underlying any of the foregoing. In this news release, words such as “may”, “could”, “would”, “will”, “likely”, “expect”, “intend”, “plan”, “goal”, “estimate” and similar words and the negative forms thereof are used to identify forward-looking statements. Such statements are subject to risks, uncertainties and other factors beyond TMR’s control, and which may cause the actual results, activity or performance of TMR to be materially different from those expressed or implied by such forward-looking statements.

Earlier this month I had the opportunity to visit Round Top, the rare-earth-element (REE) project being developed by Texas Rare Earth Resources Corp. (OTCQX:TRER). While in the Lone Star State I also paid a visit to the University of Texas at El Paso (UTEP), where much of the processing and analysis work on the project has been undertaken.

The project is located in Hudspeth County in the far west of Texas, USA, approximately 85 miles southeast of the city of El Paso. The nearest town is Sierra Blanca, 8 miles to the southeast of the deposit, with a population of around 560 people and where Texas Rare Earth Resources (TRER) has an office. The border with Mexico is nearby, some 10 miles to the south.

Round Top is one of five peaks that make up the Sierra Blanca range, the others being Triple Hill, Sierra Blanca Peak, Little Blanca and Little Round Top. According to TRER’s most recent Preliminary Economic Assessment (PEA) report (published in December 2013), these peaks are rhyolite laccoliths – intrusions of magma that have welled up between layers of Cretaceous sedimentary rock to formed domed structures. The topmost layer of sedimentary rock has eroded over time, resulting in the present exposed rhyolite formations.

The deposit is just 3 miles north of I-10, the interstate highway that starts in Santa Monica, California in the west and which finishes in Jacksonville, Florida in the east, passing through El Paso, San Antonio and Houston in Texas along the way. Round Top is therefore highly accessible by road. Sierra Blanca sits at the intersection of two branches of the Union Pacific railroad. There is an active rail spur that terminates less than three miles from the base of Round Top Mountain, serving a local company, RCL Rock, which mines an average of 6,000 t / day of similar rhyolite for railroad ballast.

My hosts for the visit were Dan Gorski, CEO and director of TRER, and Tony Marchese, chairman of the company’s board of directors.

Round Top is more than a mile across at its base, with a peak approximately 300 m (1,000 feet) above the desert plateau, which is itself approximately 1,300 – 1,400 m (4,270 – 4,600 feet) above sea level.

As part of the recent PEA report, TRER published an updated NI 43-101 compliant mineral-resource estimate for Round Top. The deposit contains an estimated 231.0 Mt of rare-earth mineral resources at the Measured level, with an average grade of 0.06 wt% total rare-earth oxide (TREO), 298.0 Mt of resources at the Indicated level, with an average grade of 0.06% TREO, and an estimated 377.0 Mt of resources at the Inferred level, with an average grade of 0.06% TREO. Each of these estimates used a cut-off grade of 0.0428% yttrium (Y).

You can see photos taken during my visit, below – just click on the thumbnails to see the full images.

In total there are an estimated 573 kt of TREOs in the Round Top deposit, with an average heavy REO (HREO) distribution of 72% of the TREOs present. In addition to the presence of REEs, the project is of interest for by-products of beryllium (Be), lithium (Li), niobium (Nb), tantalum (Ta) and uranium (U).

The first (and an admittedly blunt) question that I asked Mr. Gorski concerned the grade of the deposit. Given the low concentration of REEs at Round Top, compared to other deposits, how could future production hope to be economic – despite the proximity to infrastructure and a large pool of labor? Mr. Gorski explained that despite that relatively low grade, the distribution of the main REE-bearing mineral variety yttrofluorite was highly uniform across the deposit. Furthermore, tests at UTEP had conclusively determined that the rhyolite host rock was highly amenable to leaching, despite the fine-grained nature of the rock.

Mr. Gorski explained that once mined, the material at Round Top would be crushed into pellets, approximately 6-13 mm (0.25-0.5 inches) in diameter, before being placed onto leach pads. The pellets would then be treated with an 8 vol% dilute solution of sulfuric acid in water, which after having time to percolate through the pellet heaps, would leach the REEs and other metals of interest into solution. A series of tests at UTEP on the process achieved recoveries of over 90% of the yttrium (Y), dysprosium (Dy) and other HREEs present via this leaching process. These tests were confirmed in independent contract laboratories.

This amenability to leaching would eliminate the need for a flotation processing step, considered by a previous incarnation of the TRER management team in the initial PEA for Round Top, which was published in June 2012. Mr. Marchese commented that the updated PEA saw a dramatic drop in the estimated initial capital expenditures (capex) for the project from $2.1B to $292M, and sustaining capital from $860M to $553M. The PEA determined a pre-tax Net Present Value of $1.4B at a 10% discount, and an IRR of 67%. I note that these numbers use a conservative REO price deck that is based on current spot prices for these materials, instead of the rather optimistic prices that most REE project-development companies have used in the past couple of years.

Unit operating expenditures would be similar ($14.59 / t mined rock in the initial PEA compared to $15.16 / t mined rock in the updated PEA), despite a reduction in throughput from 80,000 t / day to 20,000 t / day of mined rock. TRER plans to produce approximately 3,200 t / year of separated REOs, with an anticipated initial mine life of 20 years. The proposed pit would focus on the northwest portion of Round Top, with rock sent to the leach pads located north of the deposit, via conveyor. This constitutes approximately 18% of the overall mineral resource, giving the project a potentially long life beyond the initial plan.

90-95% of the rock consists of the minerals quartz and feldspar, which do not react to the leaching solution. The remaining 5-10% of the rock consists of fluorites fluorides such as yttrofluorite and cryolite. Urananite, thorite and coffinite are also present, which contain thorium (Th) and uranium (U). In the rock as a whole Th levels are approximately 179 ppm and U levels are approximately 45 ppm. The rock also contains Li-rich mica, and there is evidence of Be too, though it has yet to be determined just where in the mineral assemblage this element is located. Other accessory minerals include columbite (containing Nb and Ta) and zircon (containing zirconium and hafnium).

The iron (Fe)-bearing mineral magnetite is also present in the rhyolite rock, with some of this mineral having been altered over time to form hematite, giving some of the rhyolite a pink-red color. Hydrothermal or groundwater alteration gives other sections of the rhyolite a tan to brown color.

Once leached, the pregnant solution would be subject to a multi-stage process to remove undesirable elements such as Fe and aluminum, before being subject to solvent extraction (SX) as a means of separating and purifying the concentrate, resulting in individual REOs. According to the PEA, overall recoveries of the REEs after heap leaching, separation and purification include 80% for Y and 76% for Dy. There is little detail in the PEA about the SX processes proposed for the operation, and TRER did not get into much detail on the process, though I was told that the costs of the associated SX facility (approximately $93M) are included in the overall capex estimate.

The first documented exploration in the vicinity of Round Top took place in the 1970s, when fluorite fluoride deposits and Be mineralization where identified near to Sierra Blanca Peak. In the 1980s Cabot Corporation and Cyprus Metals initiated exploration for Be at Round Top, Sierra Blanca Peak and Little Round Top. At this point the Texas Bureau of Economic Geology conducted its own extensive exploration of the Round Top area and vicinity. Associated studies in 1987, 1988 and 1990 identified REE mineralization for the first time, at Round Top.

In 2007, the predecessor to TRER, Standard Silver Corporation, acquired prospecting permits from the GLO and discovered large numbers of documented drill samples in an exploratory decline into Round Top, created by Cyprus Metals during their previous work. These samples were re-logged and analyzed as part of the most recent PEA for Round Top. Subsequent drill programs by TRER commenced in 2010. The core samples are currently stored in a large warehouse building in the vicinity of Round Top; we did not visit the building or examine core samples during the visit.

The Round Top deposit is located on land owned by the state of Texas. In 2011, TRER entered into renewable 19-year leases with the state General Land Office (GLO) totaling some 380 ha (950 acres) of land including Round Top and the vicinity. The associated mineral leases come with a statutory 6.25% royalty to the GLO, on the gross profits of all minerals that are commercially produced at the site. In addition, TRER owns the surface lease to approximately 22,300 ha (55,000 acres) of land around Round Top, and also holds more than a dozen prospecting permits on land elsewhere in Hudspeth County, covering approximately 2,900 ha (7,100 acres).

Close to the base of Round Top, on land accessible to TRER are abundant quantities of Del Rio clays, and Finlay limestone. Mr. Gorski explained that the former will be highly suitable for the production of the heap leach pads at Round Top; the latter will be suitable for neutralizing the acids used, once the leaching process has been completed. Their proximity will save significant costs in terms of the purchase and transportation of such materials, to the future project site.

TRER works closely with Nicholas Pingitore at the Department of Geological Sciences at UTEP, located 90 minutes northwest of Round Top. Dr. Pingitore is a professor in the department, focusing on analytical geochemistry and is Director of the Electron Microprobe Laboratory at UTEP. Dr. Pingitore is also a director of TRER. We paid a visit to his laboratory at UTEP, where he and his researchers have been working on various aspects of the Round Top deposit, and its amenability to processing.

Dr. Pingitore does a nice demonstration of just how permeable the rhyolite rock is, and thus amenable to leaching. Taking samples of the rhyolite that have been sectioned into different thicknesses, he adds a couple of drops of blue ink to the top surface. Within minutes, the ink appears on the other side of the section, with little expansion of the original diameter of the drops applied on the initial side. In other words, the ink penetrates “straight down” with gravity, to the other side, relatively quickly.

Dr. Pingitore noted that the minerals of interest in the rhyolite are very soluble, and that there is enough porosity (typically 3-5%) to allow aqueous solutions to soak through the rock with ease – but not so much porosity that it would do so too quickly, without dissolving the minerals of interest. The work now focuses on obtaining an optimum pellet size for the heap leaching process. I asked him what the rate-determining step or steps would be for the leaching process. He indicated that the key was how fast fresh acid diffuses through the thin films of leach solution that permeate and soak the rock particles, and thus dissolve more and more of the microscopic yttrofluorite grains. Likewise, diffusion of the liberated REEs in the opposite direction, out of the rock particles via those liquid films, also limits the rate at which the overall heap leaching proceeds.

Given the rather unusual composition of the rhyolite rock at Round Top, Dr. Pingitore conducted experiments at the Stanford Synchrotron Radiation Lightsource, part of the Stanford Linear Accelerator in California, to determine which mineral or minerals host the Y and other HREEs. By probing the atomic structure surrounding the Y in bulk samples of the rhyolite, with powerful synchrotron-generated x-rays, Dr. Pingitore said that it became evident that essentially all of the Y, and by proxy the HREEs, is hosted in yttrofluorite, substituting for some of the normal calcium atoms. Dr. Pingitore and Mr. Gorski were co-authors of a paper that detailed this characterization work, in addition to the leaching experiments on the Round Top rhyolite, published in the Chinese Society of Rare Earth’s Journal of Rare Earths in January 2014.

The laboratory at UTEP houses the usual high-end analytical equipment, including an inductively coupled mass spectrometer (ICP-MS) capable of detecting metals in solution to 1 part per trillion or better. It also houses an X-ray fluorescence (XRF) analyzer, for testing solid samples. The latter is particularly useful for quantitative leach testing; XRF analysis is conducted on powders ground and pressed into pucks, from rhyolite pellets that were crushed to various sizes and then subject to different leaching regimens. The XRF profile for each sample is compared to the untreated base case; the XRF curves for each sample can be superimposed on the base case and where REEs and other metals have been removed via leaching, this shows as reduced (or eliminated) XRF peaks for the specific element in question. These peaks are proportional to the quantity of individual elements present. This method is a simple but reliable method of quickly determining the effectiveness of the various leaching parameters used (see the images below for more detail).

Under a joint UTEP-TRER research contract, TRER provides funds for supplies, equipment usage, support personnel and the like for the laboratory investigations. Dr. Pingitore does not receive a salary or other direct or indirect financial benefit in this arrangement, and TRER confirms significant findings at one or more contract laboratories.

In addition to the geochemistry of the rhyolite rock, Dr. Pingitore has also looked at the compositional data from all of the samples taken during previous drilling campaigns at Round Top, and plotted them against depth (see the images below for more detail). By using the primary data points, rather than statistics derived from them, one can quickly see that there is little geographic variation of concentration of the individual REEs in the deposit – i.e. little variation from one drill hole to another. There is also no trend with depth, either; these plots indicate that there is consistent grade of REEs from the top to the bottom of the Round Top deposit, making it unusually uniform in distribution.

At over 4,570 square miles in area, Hudspeth County is larger than the states of Delaware and Rhode Island combined, yet has a total population of only 3,500 people per the last census. During my visit I chatted with Laura Lynch, Executive VP for External Affairs at TRER and a director of the company, about the potential impact of the Round Top project on the local community.

Ms. Lynch pointed out that the county is the poorest and sparsest populated in Texas, with a median income in the country of approximately $13-15k / year. Compare this to the median salary of approximately $50k / year that TRER anticipates will be paid to employees of the future Round Top operation. Ms. Lynch commented that these jobs (up to 150 in total) are just one reason why TRER has received very significant local support to date. Mr. Gorski further commented that wherever possible they plan to hire local people for the project, such as the folks at RCL Rock, or people currently living in the town of Sierra Blanca.

As a local land owner and as someone raised on a ranch herself, Ms. Lynch said that children in these rural areas learn a wide range of mechanical and other practical skills as they grow up, which could be put to good use at the Round Top operation. Other local landowners have commented that they welcome the development of Round Top as a means of potentially attracting their children and grandchildren to return back to the area, having had to leave for other places to find work. Having their family back in the area increases the chances of the ranches staying in the respective families in the future. This is of course a natural desire for the current land owners, who wish to leave a legacy to future generations of their families, with these properties being managed and operated tomorrow, in the same traditional ways as they are today.

Ms. Lynch commented that the 6.25% royalty on GLO mineral leases is used to fund the public school system in Texas. The anticipated $500M in royalties that this represents from Round Top, over the initial 20-year life of the mine, effectively gives the state of Texas a vested interest in the success of the Round Top project. The ongoing collaborative work at UTEP may grow and become even more significant as the project progresses, too. There is strong support for TRER’s endeavors elsewhere in El Paso outside of UTEP too. During my time in El Paso we had the opportunity to meet Robert Wingo, a local El Paso businessman, entrepreneur and UTEP alumnus who recently joined TRER’s Advisory Board to help the company work more closely with the El Paso business community.

Mr. Marchese noted that as a result of the Round Top deposit being on state (not Federal) land, the route to permit approvals for the project has the potential to be more straightforward, than if the company had to deal with Federal Bureau of Land Management or US Forestry Service land.

As the name of the company implies, TRER is very much a Texas company, focused on developing a Texas resource to the benefit of its shareholders, as well as the local and regional community. A key step for the company was teaming up with UTEP as this has helped them to advance the leaching work significantly. The company continues to work with third parties such as RDI, Gustavson Associates and Lyntek in Denver on the specific design of the scaled-up leach processes, as well as to optimize the extraction and purification process for the pregnant leach solution, once produced. Obviously the most critical question for the company is whether or not they can do that heap-leach process in a cost-effective and environmentally sustainable manner. All indications are that they are on the right path to figuring that out.

During a conversation with Mr. Marchese, he commented that one of TRER’s biggest challenges is getting people past the idea that just because a REE project based on rhyolite has not been commercialized before, does not mean that it can’t be done in the future. I have to agree with him on this point. At the end of the day each project has its own unique characteristics, and will ultimately live or die on its own merits or shortcomings. The HREE industry in southern China has clearly demonstrated that low grade is not necessarily an impediment to economic production, if the processes used to extract the REEs are simple and cost effective. If you can produce a range of products for less than the market is willing to pay for them, you have yourself a business. It will be for TRER to demonstrate that it do just that, and I for one will be most interested to see how they do.

My thanks go to Mr. Marchese and Mr. Gorski and their colleagues at Texas Rare Earth Resources Corp., for facilitating the visits to Round Top Mountain and to the University of Texas at El Paso.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Texas Rare Earth Resources Corp. (TRER). TMR’s Jack Lifton is a director of TRER. Neither Gareth nor Jack received compensation from TRER or from anyone else, in return for the writing of this article.