Skaland Graphite Operation

Skaland Graphite Operation

Skaland is the largest crystalline graphite producer in Europe and the fourth largest prodoucer globally outside of China and accounts for around 2% of global annual natural flake graphite production. Skaland is presently the world’s highest-grade operating flake graphite mine with mill feed grade averaging ∼25%C in 2019.

The Skaland graphite operation is located in northern Norway on the island of Senja and is approximately 213km from TromsØ, the nearest major town.

Graphite was first discovered in the area in 1870 and production started in 1917. Skaland Graphite AS formerly extracted graphite ore from the Skaland mine which located directly alongside the existing processing and port infrastructure, but since 2007, ore to the plant has been sourced from the nearby Traelen mine.

The maiden JORC resource at the Skaland Graphite Operation for the underground Traelen Graphite Mine in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code (2012)”) is estimated at 1.78 million tonnes at 22% TGC in the category of indicated and inferred for 397kt of contained graphite using 10% cutoff.

Table 1 – Total Mineral Resources for the Traelen Graphite Deposit (10% cutoff grade)

The mineral resource quoted at various cutoff grades as presented below (Table 2) demonstrates the high-grade nature of the deposit, with nearly 75% of the total contained tonnes reporting at 25% TGC at a 20% cutoff.

Table 2 – Resource Table at Various Cutoff Grades

Geology and Mineral Resources Estimate

Figure 1 – Location of the Skaland and Traelen Deposits

The Traelen deposit lies on the northern tip of the Skaland peninsula and consists of two main and related lithological units. The tectono-stratigraphically lower unit is a banded gneiss with alternating biotite-rich and granitic bands (locally termed “Traelen Gneiss”) and an upper unit that consists of amphibolitic gneiss. These are heterogeneous hornblende gneisses with graphite horizons, possibly metamorphic greywacke and calciferous rocks. Both units contain granitic orthogneisses, possibly as a result of partial melting of the surrounding rocks. Quartz diorites and different types of pegmatites occur as well, forming discontinous intrusions.

The graphite found in the upper unit is assumed to be primarily syngenetic and later exposed to tectonic activity leading to its present textural, mineralogical, geochemical and geometric characteristics.

The mineralised horizon is isoclinically folded and the thickest, most continuous mineralisation occurs as lens shaped bodies are oriented parallel to the main fold axis. This horizon contains the most economically interesting instances of graphite at Traelen and can vary between centimetres and 12-14m thick. There is minor graphite found in faults and along shears. There are minor exploration targets to the south and west of the current Traelen deposit which may represent either a further fold of the same horizon or a second mineralised horizon.

The rocks in the area have been exposed to at least three phases of folding and deformation with the last folding phase responsible at Traelen with a fold axis dipping 30 to 90 degrees towards the west-northwest. The existence of hypersthene, signs of partial melting and migmatisation and the occurrences of coarse-grained flaky graphite all indicate high temperature metamorphism.

Mining

Mining is currently being conducted by long hole open stoping in a bottom-up sequence using 25m levels. Future mining is assumed to be long hole open stoping in a top-down sequence.

Processing

Crushed ore from the mine is dumped into a ROM ore bin and conveyed to an autogenous mill followed by a front-end, open-ended milling circuit before processing via a three stage flotation and cleaner circuit with multiple sub-stages in each stage The Skaland Processing Facility treated ∼40ktpa of ore in 2019 and produced a graphite flake concentrate of ∼91%C. The Company estimates that the Skaland Processing Facility is operating at about 60% of nameplate capacity. A more conventional 85% utilisation rate at the production rate of 2tph of concentrate would produce ∼15-16ktpa.

The product mix of graphite concentrate produced to September 2019 includes 36% of coarse (plus 150µm) material and 64% of fines (minus 150µm).

Table 3 – Current flake distribution and final concentrate grade to September 2019 (calendar year)

The Company has advanced initiatives to improve the quality of the fines fractions to at least a conventional 94%-97% grade. It is also evaluating options to enhance the concentrate split to the coarse fractions.

Optimisation/Increased Production

Pursuant to recently received regulatory approvals, the Skaland Operation’s production limit can be increased to produce up to 16,000tpa.

The Company has conducted laboratory-scale testwork on optimising the grade of the fines (<150 micron) concentrate produced at Skaland. Results were highly encouraging with grades of 96%-99% TGC achieved. Subsequently, this program has now progressed to pilot scale testwork to determine equipment sizes required to produce high-grade concentrate.

Further testing has also generated flow sheet adjustments that have resulted in coarser size fractions reporting above 150 microns.

The production of high-grade fines (150µm) will position Skaland as a supplier of high-quality fines products that will form the feedstock for downstream value-adding, including the production of anode material. Coupled with the expected increase in coarse graphite recovery, MRC expects to improve the current basket price of Skaland graphite.

About Norway

In Norway, 98% of electricity production comes from renewable energy sources. Hydropower is the source of most of the production. With this vast resource of renewable energy, the country is becoming one of the fastest-growing industrial platforms for executing zero-carbon business strategies.

Norway is also leading the way for a transition to low emissions in transport. Battery electric and plug-in hybrid vehicles hold 50% market share of new cars registered in Norway. The speed of the transition is closely related to policy instruments and a wide range of incentives.

By originating from Norway, Skaland Graphite AS is well placed to become the world’s first vertically integrated, zero-carbon producer of Battery Anode Material, producing sustainable, environmentally sourced natural anode material for the swiftest global adopters of electrification, right on the doorstep of the fastest-growing global market in the world, Europe.

With the European and Nordic shift to decarbonised transportation, Skaland stands to become the largest producer of sustainably sourced active anode material outside of China.

see Natural Anode Materials