Graphite junior Archer Exploration (ASX:AXE) rode a wave of investor sentiment today, adding a cool 39 per cent to their stock value thanks to CSIRO testing of samples from their Campoona resource.
The explorer announced this morning that CSIRO testing showed their ultra-pure graphite was suitable for the modern lithium-ion battery market and would attract premium prices.
Results indicated that samples of graphite from Campoona showed similar behaviour to the far more expensive synthetic graphite equivalent.
Samples were obtained from milling and floatation of a composite parcel of graphite mineralisation from the deposit, creating a bulk sample which represents the early years of mining at Campoona.
The CSIRO then prepared battery electrodes from Campoona natural graphite and other commercially available graphite powders, which were used to construct coin cells for testing of each cell and the properties of anodes, with results showing charge capacities equivalent to synthetic graphite.
Archer will now commission the CSIRO to test the Campoona ultra-pure graphite at different particle size distributions to confirm expectations that capacity can be further improved with finer micronised particle sizes.
Archer will lodge a mining lease application with the South Australian government next week, which should see mining commence in mid-2016.
The company expects to produce 10,000 tonnes of battery-grade product from Campoona Shaft each year, over a mine life of 13 years, with mining to then move to Central Campoona.
This morning’s announcement saw a sharp rise in Archer’s share price from yesterday’s close of $0.09 to $0.13 by 1pm, and back to $0.125 by market close, a level not seen since 16 January.
Managing director Gerard Anderson said it was very pleasing that the CSIRO had confirmed Campoona ultra-pure graphite was suited to battery applications.
“Battery grade graphite sells at a substantial premium to traditional graphite and this will further underpin the profitability of our planned graphite mining operations on Eyre Peninsula,” he said.
“The company remains excited by the growth prospects for the lithium-ion battery market which will see demand for our product increase as electric vehicles, power levelling and other technologies become more common, especially over the next five years.
“The controllable particle size of Archer’s natural product is also expected to enable greater utilisation of our Campoona graphite.”
Anderson flagged expectations for installed lithium-ion battery capacities to increase dramatically over the next decade thanks to key drivers in growth such as the new Tesla home battery announced last week.
The Powerwall was introduced by Tesla CEO Elon Musk as a wall-mounted energy storage unit which can hold 10 kilowatt hours of electric energy, and deliver at an average of two kilowatts, which will retail for US$3500.
“Archer believes that the use of lithium-ion batteries for storing electricity generated by roof-top photovoltaic systems, has the potential to fundamentally change the retail electricity market and to substantially increase the demand for high quality graphite,” Anderson said.
“Such a game changing outcome is unfolding now with Tesla planning to market their systems from as soon as August this year.”
Archer Exploration’s Campoona resource is the Eyre Peninsula’s largest graphite JORC resource with 8.55Mt at 9.0 per cent Total Graphitic Carbon (TGC) for 770,800 tonnes of graphite.
Lincoln Minerals are next in line to open fresh graphite production in early 2016, with a mining lease application in process for the Kookaburra Gully resource, JORC 2.2Mt at 15.1 per cent TGC, for a total resource of 332,000 tonnes.