The Graphite Game Changer

posted in: Charts, Graphite, Tesla | 0

$12.2 trillion will be invested in global power generation in the next 35 years and the Tesla Gigafactory is just the beginning

giga

 

According to a Bloomberg report earlier this year, $12.2 trillion will be invested in global power generation in the next 25 years, with renewables counting for 2/3s of the investment. Tesla, as witnessed by its multi-billion dollar gigafactory, is the first to strike.

Tesla CEO Elon Musk’s goal is to be building 500,000 electric-vehicles (EV) by 2020. With this planned production rate in the latter half of the decade, Tesla alone will require today’s entire worldwide production of lithium-ion batteries. There are two primary raw materials necessary to build lithium-ion batteries; lithium and graphite. In fact, it is estimated that 15 times more graphite than lithium is required in a lithium-ion battery.

In a clear indication that Tesla has begun sourcing the raw materials needed for its Nevada gigafactory, last week Tesla signed a 5-year lithium supply agreement with Vancouver based Pure Energy. This puts Tesla well on its way to meeting its lithium supply needs, however, the company still faces the task of securing its graphite needs for the gigafactory.

Tesla can acquire this through the supply of synthetic graphite, which is very expensive (up to $20,000 per tonne) and requires fossil fuels to manufacture. Both of which go against Tesla’s announced mandate to reduce the cost of battery production and move away from reliance on hydrocarbons.

Alternatively, they can secure off-take from a high quality, graphite deposit, much like they did with the Pure Energy lithium deposit (which would be aligned with their corporate mandate). Become vertically integrated; own your raw material; guarantee quality control and secure your future supply. Given the substantial concerns surrounding Chinese graphite mines (world’s largest graphite producer) it is quite likely that Tesla will seek a North American (possibly even American) source for its graphite.

Enter Graphite One (GPH:TSX-V, GPHOF:OTCQX) and its Graphite Creek Deposit in Alaska.

The Graphite Creek Deposit is America’s biggest ‘large flake’ graphite deposit with an indicated graphite resource totalling nearly 18 million tonnes at 6.3% Cg with a 3% cutoff in addition to an inferred resource totalling 154.36 million tonnes at 5.7% Cg. It is a high grade, high quality, potential 100 year life graphite mine in the United States with excellent infrastructure. Graphite Creek also offers direct ocean access to the western seaboard:

 

Graphite Creek

There have been signs of accumulation in Graphite One shares (GPH.V) in recent weeks with volume increasing substantially along with price:

GPH

GPH shares have risen above the 200-day moving average for the first time since May. A further rally above minor resistance near .120 would indicate a nascent uptrend has begun. 

With renewable energy clearly representing the largest global investment opportunity over the next few decades there stands to be a huge opportunity in profiting from the raw material suppliers to the renewable energy space. The investment opportunity in electric-vehicles is both massive and multi-faceted, and there are sure to be dozens of big winners along every step of the electric-vehicle food chain. At its current modest C$25 million market capitalization Graphite One (GPH.V) stands a very good chance of being one of these big winners.

Disclaimer

The EnergyandGold.com employees are not Registered as an Investment Advisor in any jurisdiction whatsoever. EnergyandGold.com employees are not analysts and in no way making any projections or target prices. Neither the information presented nor any statement or expression of opinion, or any other matter herein, directly or indirectly constitutes a representation by the publisher nor a solicitation of the purchase or sale of any securities. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. The owner, publisher, editor and their associates are not responsible for errors and omissions. They may from time to time have a position in the securities mentioned herein and may increase or decrease. Please always do your own research. Copyright All images in this document are copyrighted by the concerning companies. Still, the owner, publisher, editor and their associates are not responsible for errors and omissions concerning this data. Important This document is distributed free of charge, and may in no circumstances be sold, reproduced, retransmitted or distributed, without express written consent from EnergyandGold.com.