Green light for $600m Endako Mine expansion The Endako Mine west of Prince George has been given the green light for a $600 million expansion that will create about 160 jobs.

The molybdenum mine, owned by Thompson Creek Mining Ltd. (TSX:TCM) and Sojitz Corp., has received a Mines Act permit amend-ment from the Ministry of Energy and Mines.

The expansion will generate an estimated $90 million to $100 million annu-ally in economic activity.

It will also provide temporary or even perma-nent work for some of the 36 workers idled by the recent explosion and fire at the Babine Forest Products mill in Burns Lake.Monday, March 12

Crosshair welcomes end of Labrador uranium mining moratoriumVancouver-based uranium mining company Crosshair Energy Corp. (TSX:CXX) is welcoming a move last week by the Nunatsiavut government of Newfound-land and Labrador to lift a moratorium on the working, production, mining and development of uranium on Labrador Inuit Lands.

The moratorium had been in effect since April 2008.

Crosshair president and CEO Stewart Wallis said: “We’re excited to get back in there to work and advance our projects,” he said. Monday, March 12

Review of jet fuel pipeline suspendedVancouver Airport Fuel Facilities Corp. (VAFFC), the proponent of a con-troversial jet fuel pipeline through Richmond, has been granted a temporary sus-pension of the review of the project’s application for an environmental assessment certificate.

According to the VAFFC, the request for suspension was made to allow the VAFFC to complete some studies in response to requests from Environment Canada for information on the potential effects of a fuel spill.Tuesday, March 13

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Vancouver miners scrambling for graphite projectsNew Chinese export rules and rising demand for electric cars turn graphite into North America’s latest hot commodity

By Joel McKay

Vancouver’s junior min-ers are rushing to stake

claims around the world for a commodity that, until re-cently, was best known for its use in pencils.

Thanks to an increased demand for lithium batter-ies and new export rules in China, graphite has quick-ly sparked the latest West Coast resource frenzy as miners attempt to cash in on rising prices.

Just a few years ago, a tonne of large flake graphite sold for between US$500 and US$600.

Today, prices run between US$2,500 and US$3,000.

Kiril Mugerman, a re-search analyst at Indus-trial Alliance Securities in Montreal, said miners are hitting the ground in search of graphite in Canada, Eur-ope, Africa and Australia.

In fact, so many com-panies have taken up the commodity in the last few months it’s hard to separate the serious businesses from those that have jumped on the bandwagon.

“Consider there’s three to five [new] projects appearing every day, it’s hard to know who to look at,” Mugerman said.

Similar to the ongoing demand for rare earth ele-ments, graphite has become the latest commodity craze thanks to its use in laptops, smartphones and other gadgets.

Siddharth Rajeev, an analyst at Fundamental Re-search in Vancouver, said the highly conductive commod-ity’s use in lithium batteries has increased its popularity.

There’s more graphite than lithium in the average lithium battery.

“The biggest boosting is going to come from the in-creased demand for lithium batteries in cars,” said Ra-jeev. “The demand growth for graphite that can be used for these applications can be high.”

On top of that, China, which accounts for more

than 60% of the world’s graphite production, has im-plemented new export regu-lations to limit the amount of graphite that’s sold to cus-tomers beyond the Middle Kingdom.

“They’re starting to hoard, and it’s the same story that’s happening with rare earth elements,” explained Paul Gill, president and CEO of Vancouver’s Lomiko Metals (TSX-V:LMR).

His company’s share price has spiked $0.15 in re-cent weeks as it continues to explore the Quatre Milles early-stage graphite project in Quebec.

Other companies such as Focus Metals (TSX-V:FMS) a nd Nor t hern Graph-ite (TSX-V:NGC) have also enjoyed rising share prices and have proven there’s money to be raised for graph-ite projects.

Last year, Nor t hern Graphite hit the market with a $4 million IPO, while Focus closed a $20 million private placement.

Ryan Fletcher, director of corporate development at Vancouver’s Zimtu Capital (TSX-V:ZC), said his com-pany started snapping up graphite projects after other graphite-focused explorers raised $40 million to $50 million on the market in the space of a couple months.

“We saw an opportunity in this space, and we acted on it,” said Fletcher, whose company has announced three graphite deals in the

last month.But are the risks worth

the rewards?Rajeev said only projects

that can produce large flake graphite would likely pay off for investors.

E a g l e G r a p h i t e , a Courtenay, B.C.-based com-pany that operates Western Canada’s only graphite mine in the Kootenays, anticipates being ahead of the demand curve for several years.

“With current orders ex-ceeding our ability to pro-duce … we feel the time is right to expand produc-tion to several times our present capacity,” said Eagle president Jamie Deith.

For Mugerman, the only properties worth focusing on are those that can be mined via open-pit and have high-grade, large flake graphite deposits.

Still, there are so many juniors rushing into graph-ite projects now that he said it would be some time before the true contenders emerge.

“Investors need to be careful … it’s very easy in Canada to pick up projects in graphite … doesn’t mean it’s the right purification, the right grade or the right flake distribution.”

For companies such as Zimtu, however, the possible rewards outweigh the risks for now.

Said Fletcher: “It’s al-ways hard to be early be-cause you’re sticking your neck out, but being early also means you get a lot of the upside.” •jmckay@biv.com

“It’s always hard to be

early because you’re

sticking your neck out,

but being early also

means you get a lot of

the upside as well”

– Ryan Fletcher,corporate development director,

Zimtu Capital

Zimtu Capital corporate development director Ryan Fletcher: the supply-demand factors for graphite projects are compelling

March 20–26, 2012 Business in Vancouver 5News