Graphite One Closes Landmark 2023 Debt
Free,
Two U.S. Department of Defense Grants,
New Strategic Investor
and U.S. Government Confirmation that Graphite Creek Deposit is
"among the largest in the world'
Accelerated Path-to-Production Objectives Set for
2024
VANCOUVER, BC, Jan. 2, 2024
/CNW/ - Graphite One Inc. (TSX-V: GPH) (OTCQX: GPHOF)
("Graphite One", the "Company", or "G1") is pleased to
provide the Company's 2023 year in review and a look forward to its
objectives for 2024.
2023 Highlights:
- G1 receives first Department of Defence ("DoD")
grant, US$37.5
million: After 2022 designation of graphite
as a Defense Production Act Title III material, Graphite One
awarded US$37.5M DoD grant to
accelerate Feasibility Study
- G1 receives second DoD grant, US$4.7 million: To develop a
domestically sourced graphite fire foam suppressant, to meet
congressional mandates of replacing legacy suppressants known to be
both hazardous to the environment and human health
- Alaska's Bering Straits
Native Corporation ("BSNC") makes strategic
investment in G1 for up to US$10.4M
- Taiga acquires Net Smelter Production Royalty,
makes G1 debt-free heading into 2024
- US Geological Survey confirms Graphite Creek
as the largest flake graphite deposit in the U.S. and "among the
largest in the world"
- Production of sample materials of Alaska natural graphite and synthetic graphite
for testing by a U.S. National Lab and EV end-users
- Accelerated Drilling Program: DoD grant
enables 2023 drilling program four times larger than in 2022; 52 of
52 resource holes intercept graphite
- Graphite One's production is expected to qualify under
the Inflation Reduction Act ("IRA") tax credits in both
categories, based on U.S. Treasury/Department of Energy guidance
and received strong support from Alaska elected officials
"2023 was a year of major milestones for Graphite One," said
Anthony Huston, Graphite One's
President and CEO. "We were awarded two Department of Defense
grants, the USGS once again validated the significance of the
Graphite Creek deposit, and we welcomed a strategic investment from
Alaska's Bering Straits Native
Corporation, approved unanimously by BSNC's Board. We also
quadrupled this year's drilling program year-over-year, made
possible by the DoD grant. 52 of 52 holes drilled in the
summer program intercepted graphite, proving the excellent
continuity of near surface, flat lying graphite mineralization.
We commenced delivering samples of both natural and synthetic
graphite, materials essential to EV battery anodes, to potential
end-users and a U.S. National Lab for further development of end
products. And with the sale of the NSR and the continued
support from Taiga, G1 is debt free heading into 2024."
"It is a testament to our strategic plans and talented G1 team
and Board aiming to fill the lack of battery grade graphite
material in the United
States."
Mr. Huston continued "We have incredible momentum and believe we
are very well positioned to accelerate our path-to-production
schedule."
2024 Accelerated
Path-to-Production Objectives
Early-stage Commercial Synthetic Graphite
Production. Subject to financing and permitting
requirements, Graphite One enters 2024 planning an early-stage
commercial facility to complete a finishing and coating line for
synthetic graphite by late 2025, with Phase 1 production of 25,000
tonnes of synthetic anode material by mid-2026 and production
growth from then on as market demand requires.
1Q 2024: Submission of DoE Proposal for Early-Stage
Commercial Synthetic Graphite Anode Facility. G1
intends to submit a proposal to the U.S. Department of Energy
("DoE") seeking a grant for a precursor development plant and an
early-stage commercial synthetic graphite anode facility.
"Management currently anticipates construction and commissioning
costs are estimated at US$430 million
subject to any unforeseen delays or varied market conditions," said
Mr. Huston. "This is planned to be a direct path to revenue,
even as we continue to develop our Graphite Creek natural graphite
deposit."
1Q 2024: Site Selection for the Graphite Anode Material
Production Facility. The site will be in the
contiguous United States, in
keeping with G1's complete U.S.-based supply chain
strategy.
1Q 2024: Completion of Graphite One/Sunrise
TLA. The Technology License Agreement with Sunrise
(Guizhou) New Energy Material Co.
Ltd. ("Sunrise") (the "TLA") to license technology to be used
in a planned graphite anode material production facility and is
intended to comport with the U.S. Treasury/Department of Energy
federal tax credit guidance.
4Q 2024: Completion of Feasibility Study.
With DoD Defense Production Act funding, G1 remains on track to
complete the Feasibility Study ("FS") in Q4 2024, a full year ahead
of the Company's initial schedule.
The Company reported progress in 2023 on the following
fronts:
Graphite One Awarded US$37.5 Million Defense Production Act ("DPA")
Title III Grant
In July 2023, after the 2022
Presidential Determination designating graphite as a Defense
Production Act Title III material "essential to the national
defense," Graphite One was awarded a US$37.5
million grant from the Department of Defense to accelerate
the Company's Feasibility Study, cutting completion time for the FS
by a full year to Q4 2024. The drawdown of the grant is contingent
upon the Company's obligation to raise an equivalent
dollar-for-dollar amount to complete the Feasibility Study.
"This investment to increase domestic capabilities for graphite
exemplifies [DoD's] Industrial Base Policy's commitment to building
a resilient industrial base to meet current and future national
defense requirements," said Dr. Laura Taylor-Kale, DoD
Assistant Secretary for Industrial Base Policy. "The
agreement with Graphite One (Alaska) is in furtherance of the Defense
Department's strategy for minerals and materials related to
large-capacity batteries1."
Graphite One Awarded US$4.7 Million Contract by U.S. Department of
Defense's Defense Logistics Agency to Develop Graphite-Based Foam
Fire Suppressant
In September 2023, G1 was
awarded a second DoD grant, a US$4.7 million contract from the U.S. Department
of Defense's Defense Logistics Agency ("DLA") to develop a graphite
and graphene-based foam fire suppressant as an alternative to
incumbent PFAS fire-suppressant materials, as required by U.S.
law.
"Graphite One is pleased to begin work on this Defense Logistics
Agency project, which responds to the legally-mandated requirement
to develop a new alternative to long-standing foam fire
suppressants which are known to have toxic impacts on human health
and the environment," said Anthony
Huston, President and CEO of Graphite One. "This DLA
contract underscores the importance of graphite for innovative
technology applications beyond the renewable energy markets – an
important part of Graphite One's advanced graphite materials
strategy."
The work is being undertaken with Graphite One's project
partner, Vorbeck Materials Corp., an experienced defense contractor
developing advanced graphene and graphite applications.
2023 Financings – Graphite One
Welcomes Strategic Investment from Bering Straits Native
Corporation and Warrant Exercises
During 2023, Graphite One received proceeds of US$13.3 million from the exercise of warrants by
the warrantholders and a US$2.0
million initial private placement by
BSNC.
In September 2023, Graphite
One announced a strategic investment from BSNC for up to
US$10.4 million. Under the
terms of the agreement, adopted by a unanimous vote of the BSNC
Board, BSNC made an initial investment of US$2.0 million in Graphite One, with an option to
invest an additional US$8.4 million,
including the exercise of warrants, fully supporting the
development of the Graphite Creek deposit.
"This is not just an investment in Graphite One, it is a
long-term investment in our region. We at BSNC have watched for
years as Graphite One has worked to advance the Graphite Creek
project and become a friendly neighbor in the region," said
Dan Graham, BSNC Interim President
and CEO. "Graphite One has told us of its intent to develop an
environmentally responsible project and provide an exciting
economic opportunity for the region that hopefully will play a
crucial role in the nation's transition to a clean energy future.
This is at the heart of our Board's unanimous support of the
project2."
Formed in 1972, BSNC is the regional Alaska Native Corporation
("ANC") for the Bering Strait region, which includes the
Seward Peninsula in Western Alaska and the coastal lands
surrounding Norton Sound. The Graphite Creek Project is
located on State and private land in the BSNC region.
As part of the agreement, Graphite One and BSNC will partner
on continued regional and community development.
2023 Financing – Graphite One
Enters Into Loan Agreement of up to US$5
million with Taiga Mining Company Inc.
In July 2023, Graphite One and its
wholly owned subsidiary, Graphite One (Alaska) Inc. ("G1 Alaska") entered into an unsecured loan
agreement for advances up to US$5
million (the "Loan") with Taiga Mining Company Inc.
("Taiga"), its largest shareholder. The Loan matures on
July 19, 2024 and the interest on the
outstanding balance is accrued at an interest rate of twelve (12)
percent per annum. As consideration for the Loan being
accessible to the Company, G1 Alaska granted Taiga an option to acquire a
Net Smelter Production Royalty interest ("NSR") in 0.25% increments
for every US$1,250,000 advanced up to
a maximum of one (1) percent on the 133 Alaska state claims owned
or leased by Graphite One, which the Company bought back from the
original royalty holder for approximately US$450,000 (refer to press release dated
June 20, 2023, Graphite One Closes
the Buyback of Net Smelter Production Royalty).
The option was exercised in December
2023 and the outstanding balance on the Loan of $5.0 million and accrued interest of $0.22 million was deemed to be the consideration
paid for the purchase of the NSR.
The NSR commences on the first day of the month in which the
first concentrate is produced from certain of the mineral claims
and lasts for a period of 20 years.
With the sale of the NSR and the continued support from Taiga,
the Company is debt free heading into 2024.
USGS Again Confirmed Graphite
Creek as U.S.'s Largest Graphite Deposit and "among the largest in
the world"
In March 2023, G1's Graphite Creek
resource was again confirmed as the largest known graphite deposit
in the United States by the U.S.
Geological Survey ("USGS") and "among the largest in the
world."3
"The new USGS report underscores our confidence that Graphite
Creek is truly a generational strategic resource," said Mr. Huston
in response to the new USGS report. "It anchors our supply
chain strategy – from our mine to our planned advanced materials
manufacturing plant and our recycling facility – to build a 100%
U.S.-based graphite supply chain."
Expansion of Measured and Inferred
Resource at Graphite Creek by 15%, Based on Full Analysis of 2022
Drilling Results
In February and March 2023,
analysis of the 2022 drilling increased Graphite One's Graphite
Creek Measured and Indicated Resource by 15.5%. The Measured and
Indicated Resources now stand at 37.6
M tonnes at 5.14% graphite, with an Inferred Resource of
243.7 M tonnes at 5.07%
graphite.
The Company also reported that resource holes drilled 2 km east
of previous drilling and 4 km west of the PFS pit boundary showed
significant intervals above cut-off grade, indicating that the
Graphite Creek resource remains open east and west.
U.S. National Lab
Collaborations
In January 2023, G1 announced
collaborations with two of the DoE's National Labs. The
Company concluded a Material Transfer Agreement with Pacific
Northwest National Laboratory ("PNNL") to test anode active
and other materials to verify conformity to EV battery
specifications and delivered Graphite Creek sample material to
Sandia National Laboratories to test for the occurrence of
additional Critical Minerals and assess recovery potential as part
of Sandia's green extraction processing work, conducted under the
auspices of Sandia's Climate Change Security Center.
Anode Samples Manufactured from G1
Alaska Natural Graphite
In April 2023, G1 announced that
it had received active anode material samples produced from
Graphite One's Alaska graphite by
Sunrise. The sample material and the sample specification
data have been provided to PNNL for additional testing, and sample
material has been sent to a leading Electric Vehicle (EV)
manufacturer for evaluation.
2023 Drilling Program Quadruples
Footage Drilled in 2022, intersecting graphite in 52 of 52
holes
With the support of the DoD DPA grant, Graphite One carried out
a large-scale drilling program, quadrupling the total number of
feet drilled in 2023 compared to 2022. All 52 resource holes
intersected visual graphite mineralization and continued to
demonstrate exceptional consistency of a shallow, high-grade
graphite deposit that remains open both to the east and west of
G1's Graphite Creek deposit.
The assay results on the remaining drill holes from the 2023
Field Program will be released in early 2024.
Graphite One Delivered Synthetic Graphite Material Key to
Potential End-Users
In early December 2023,
Graphite One announced the delivery of
synthetic graphite anode material samples for analysis by
U.S.-based global end-users. Three of the active anode material
samples delivered are each designed to meet different lithium-ion
battery requirements: high energy capacity above 360 mAh/g; fast
charging above 4C; and cycle life above 6,000 cycles,
respectively.
These material deliveries are consistent with Graphite One's
updated plan to first construct a synthetic anode material
production facility to produce a range of synthetic anode
materials. A natural graphite anode material production line would
later be added, in time to receive natural graphite from Graphite
Ones's Graphite Creek deposit near Nome,
Alaska once it is permitted and operating. Ultimately
Graphite One intends to produce both synthetic and natural graphite
anode materials for lithium-ion battery applications in North
America.
The synthetic graphite samples were prepared for Graphite One by
Sunrise. The Company and Sunrise are currently negotiating
the TLA to share expertise and technology for the design,
construction, and operation of Graphite One's proposed U.S.-based
graphite material manufacturing facility. The TLA is intended to
comply with the requirements of the IRA so that the use of the
licensed technology itself to make Graphite One's anode materials
would not affect its customers' eligibility to qualify for IRA tax
credits. Sunrise had previously prepared natural graphite anode
materials for Graphite One using Graphite Creek graphite
concentrate.
"With the U.S. currently not producing any natural and synthetic
anode materials, Graphite One has formulated a fast-track
path-to-production strategy jump-starting our battery anode
material production," said Mr. Anthony
Huston. "In contrast to the typical resource development
track, our strategic plan is to make Graphite One a synthetic anode
material producer while Graphite Creek moves through permitting and
into production. Ultimately, Graphite Creek's natural graphite
would supply our anode material facility alongside our synthetic
production, to deliver a full range of natural and synthetic anode
materials to EV customers, 100% manufactured in the United States."
Strong Support from Alaska
Elected Officials
G1's project continued to receive strong support from the Alaska
Congressional delegation of Senators Lisa
Murkowski and Dan Sullivan
and Congresswoman Mary Peltola as
well as Alaska Governor
Mike Dunleavy. In July 2023, Senator Murkowski took the Senate
floor to express support for Graphite One and its development of
the Graphite Creek deposit near Nome,
Alaska.
In her address, Senator Lisa
Murkowski stated, "I've always supported Graphite One and
what they're doing in Alaska, but
after my site visit there on Saturday, I'm convinced that this is a
project that every one of us, those of us here in the Congress, the
Biden Administration, all of us needs to support. Graphite
One's vision is to build a complete domestic supply chain for
natural graphite. Their project would be anchored by responsible
mining of the Graphite Creek deposit producing tens of thousands of
metric tons a year, but it would also extend to a battery anode
manufacturing facility in Washington
State which would be co-located with a battery recycling
plant, which is why their CEO Anthony
Huston often describes Graphite One as a technology company
that mines graphite. This, Mr. President, is a major opportunity
for us."
The full address can be found here.
Graphite One Donates $130,000 to Local Communities
Graphite One donated $30,000 to
the Nome Emergency Shelter Team
which provides shelter services to the local community of
Nome, Alaska. The Company
also worked with Artic Access, a non-profit organization in
Nome, Alaska whose employees are
local community members that have completed a rehabilitation
program to supply camp janitorial services to our camp operations
during the summer drilling program. "These people did a
terrific job, and we look forward to working with Artic Access and
their team in the future" said Mike
Schaffner, Senior VP, Mining.
Graphite One has also donated $50,000 each to the communities of Teller and
Brevig Mission for support projects that benefit the quality of
life of the community members.
About Graphite One Inc.
GRAPHITE ONE INC. (TSX‐V: GPH; OTCQX: GPHOF) continues to
develop its Graphite One Project (the "Project"), with the goal of
becoming an American producer of high grade anode materials that is
integrated with a domestic graphite resource. The Project is
proposed as a vertically integrated enterprise to mine, process and
manufacture high grade anode materials primarily for the
lithium‐ion electric vehicle battery market. As set forth in
the Company's 2022 Pre-Feasibility Study, potential graphite
mineralization mined from the Company's Graphite Creek Property is
expected to be processed into concentrate at a graphite processing
plant. The proposed processing plant would be located on the
Graphite Creek Property situated on the Seward Peninsula about 60 kilometers north of
Nome, Alaska. Graphite anode
materials and other value‐added graphite products would be
manufactured from the concentrate and other materials at the
Company's proposed advanced graphite materials manufacturing
facility expected to be located in the contiguous United
States. The Company intends to make a production decision on
the Project upon the completion of a Feasibility Study.
On Behalf of the Board of Directors
"Anthony Huston" (signed)
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This release includes certain statements that may be deemed
to be forward-looking statements. All statements in this release,
other than statements of historical facts, that address the
expectations of Graphite One to produce both natural and synthetic
graphite anode materials used in lithium-ion battery applications,
the anticipated timing for production and amount produced of
synthetic graphic, the outcome of any grant submissions to the DoE,
location and timing for a graphite materials manufacturing
facility, execution of the TLA with Sunrise, receipt of regulatory
approvals, exploration drilling, exploitation activities and events
or developments that the Company expects, are forward-looking
statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on
reasonable assumptions, such statements are no guarantees of future
performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward-looking statements include the ability for Graphite One and
Sunrise to enter into a TLA, the actual compliance with the IRA
that the TLA is anticipated to address, actual costs of
construction and commissioning, receipt of all necessary regulatory
approvals, market prices, exploitation and exploration successes,
continuity of mineralization, uncertainties related to the ability
to obtain necessary permits, licenses and title and delays due to
third party opposition, changes in government policies regarding
mining and natural resource exploration and exploitation, and
continued availability of capital and financing, and general
economic, market or business conditions. Readers are cautioned not
to place undue reliance on this forward-looking information, which
is given as of the date it is expressed in this press release, and
the Company undertakes no obligation to update publicly or revise
any forward-looking information, except as required by applicable
securities laws. For more information on the Company, investors
should review the Company's continuous disclosure filings that are
available at www.sedarplus.ca.
____________________________________
1
https://www.graphiteoneinc.com/graphite-one-awarded-37-5-million-department-of-defense-grant-under-the-defense-production-act/#:~:text=This%20investment%20to,large%2Dcapacity%20batteries
2
https://www.graphiteoneinc.com/graphite-one-welcomes-strategic-investment-from-bering-straits-native-corporation-bsnc-creates-regional-community-development-program/#:~:text=This%20is%20not,of%20the%20project
3
https://www.usgs.gov/news/technical-announcement/usgs-updates-mineral-database-graphite-deposits-united-states
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