GRAPHITE

Sri Lanka has a long history of producing the world’s purest graphite, but the existing mines are located on the Western side of the island. Previously known graphite deposits on the island consist of narrow veins (usually no more than a couple of feet thick) deep below the surface requiring expensive underground mining. Finding a significant new source of easily accessible, high purity graphite on the Eastern side of the country was unanticipated and exciting.

Core samples were immediately sent to an independent lab in Sri Lanka for analysis and the graphite was found to be of extremely high purity (99.9%). Samples were then sent to the certified lab of Saint Jean Carbon in Canada. Testing at Saint Jean Carbon further confirmed that the Seruwila graphite is of extremely high purity

In addition, the graphite was found to immediately break away from the host rock upon impact. This characteristic is very important because it not only significantly reduces the costs of production but eliminates many of the damaging processes that the graphite must be subjected to in order to obtain the qualities required. Canadian graphite ore for example tends to be highly intercalated in the hard host rock requiring expensive processing to liberate it. All of these factors combine to place Seruwila graphite in an extremely strong position compared with other sources to meet the growing needs of the EV battery market.

  • Mineralization is relatively shallow

  • Graphite veins are wide, long, and easily followed

  • Suitable for open pit mining and therefore low extraction costs

Seruwila Graphite Sample

Mining

Seruwila Graphite Core Sample Results

Processing

  • Because the graphite immediately releases upon impact, it has very favourable implications to the milling process

  • Proof of operation complete

  • On-site crushing (toggle and roll) and proprietary air classification will be sufficient to increase the ore grade to 85%

  • All the metals and heavier material can be separated and stored for future processing

  • By removing a high percentage of waste ore, the graphite can be economically transported to an industrial site for further processing at SAG mill and wet mills.

  • Processing on an industrial site provides access to existing utilities and allows for the use of closed systems, i.e. recycled water

  • Because less ore is running through system smaller processing off-site facilities are required

  • Reduced tailings results in lower costs for environmental remediation

Demand

  • Demand for graphite is expected to surge as EV sales grow. Despite discussions surrounding changes in battery chemistry, graphite will remain a key element in EV batteries for at least the next decade

  • The natural purity of graphite is essential for two reasons. i) cost of processing and ii) quality of finished product. Not only does additional processing adds costs, it can also scratch and otherwise damage the graphite reducing its qualitative features and desirability to end users

  • Seruwawila graphite is among the purest in the world and therefore preferable over other sources for the requirements of battery manufacturers

Supply

  • Current supply chains will struggle to meet anticipated demand

  • China currently produces 70 % of the global graphite supply, however, there are concerns regarding the depletion of China’s ore reserves and stricter enforcement of environmental regulations. In addition, only a small proportion of China’s graphite supply is large flake – which is optimal for lithium-ion batteries

  • Although there are some new African sources in development, the graphite is of lower quality and will require additional processing to meet required purity

  • Synthetic alternatives are extremely expensive in comparison

  • U.S. government has identified graphite as amongst 35 minerals critical to countries economic and national security

Graphite Project Timeline

Process Flow Feasibility

Project Scope and Achievement Plan

Q1/2 - 2020

  • Permit planning & utility applications

  • Complete design & start planning manufacture

  • Begin mine infrastructure & layout

  • Set up exploration areas for continuation of testing and drilling

  • Sign additional off-take agreements

  • Track graphite veins using advanced thermal inertia mapping (ATIM)

Q2/3 - 2020

  • Accept Delivery of Graphite Processing Plant

  • Establish Program for completion

  • Begin Intake process Ore material

  • Start up plant and implement QC protocol

  • Obtain shell company for next round of financing

Q4 - 2020

  • Establish Production Ramp Up & QC testing and acceptance

  • Training and Onboard Full Implemented operations team

  • Relocate construction teams to phase 2 construction

  • Set up logistics for transport to market

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