VIDEO: Ceylon Graphite CEO Bharat Parashar Talkes About the Abundance Graphite in Sri Lanka
Bharat Parashar, CEO of Ceylon Graphite (CVE: CYL, OTCMKTS: CYLYF) talks to James about his mining interests in Sri Lanka. The graphite there is apparently among the best deposits in the world. Graphite is a major component to used batteries, sometimes as much as 60%.
James West: Bharat, thanks for joining us today.
Bharat Parashar: Thank you.
James West: I notice by the most recent press releases that you guys have reclaimed or refurbished your K1 shaft down to 100 feet in Sri Lanka. Why don’t you give me an overview of the progress you’ve made to date, and what is the significance of refurbishing shaft K1 to 100 feet?
Bharat Parashar: We have taken one side, which is K1, which is in Orapola (phon) in Sri Lanka, and we have an existing shaft there which we’ve reclaimed. You’ve got to go back in history to understand why we’ve done that: Sri Lanka used to produce 50 percent of the world’s graphite, turn of the 19th century and the 20th century. At that time, mining was done in the mud, and in the soil. And the miners went up to the rock and stopped, because they just did not have the technology to go into the rock.
In today’s world what we do is, we only mine in the rock. So our whole hypothesis has been that if we look at these shafts where mining was done before, and we get to the bottom of the shaft, we’ll see graphite veins of substantial size to be able to mine. And it’s also the quickest way to get to production at the lowest possible cost.
James West: Because this is vein graphite, which is very high grade?
Bharat Parashar: Absolutely. There are three kinds of graphite: flake, vein and amorphous, and vein graphite has 90 percent-plus carbon content. Once you get to it, it’s the easiest to mine.
James West: So do you have a sense yet of a resource, or is that yet in the future with more drilling?
Bharat Parashar: We are never going to theoretically ever go to the typical Canadian Western standard 43-101 resource base, because rather than have one mega-mine, in all probability we could have 121 mines or more, because in some of our grids, we have more than one shaft.
Now each shaft will eventually be a mine in itself if we find graphite at the bottom, and we think we can do maybe 300 tonnes a month of each site – each shaft, at least, initially.
James West: How can the investor be, you know, confident that there’s an abundance of these veins versus the possibility that the veins have all been superficial, close to the surface, and they’ve been mined out?
Bharat Parashar: Sri Lankan graphite is the best quality graphite on the planet – that’s a known fact. What I can also tell you is, the veins exist in the rock. The government mine of Kahataga was started in 1873; it’s at 3,000 feet now and it’s still got a huge vein. Veins don’t just sit there; they sort of progress and traverse over a wide area.
James West: Sure.
Bharat Parashar: So there is other graphite available.
James West: So what is the macro picture for graphite from the Sri Lankan geological perspective? Who are they going to sell it to, what’s driving demand for it, who will the customers be?
Bharat Parashar: I think you’ve got to step back a bit and see what graphite’s all about today. So graphite today is the new oil, and the reason I say that and the reason I so firmly believe in that is, the hydrocarbon industry is going out of vogue, and everyone is switching to alternative energy.
Alternative energy is great, but there’s no storage. So batteries of different sizes are evolving, and graphite is the main component in a battery. People say ‘lithium ion battery’, for example, but it really should be called a ‘grapho-lithium battery’ because 60 percent of your material in a battery is graphite, and only 40 percent is lithium and its related components.
Storage is taking a bigger and bigger role in our business. As you might have read, the mega-storage factories are coming up around the world. I think our friends from Tesla just developed a huge storage plant in Australia, 250 megawatts, and this is just going to get bigger and bigger.
And as this starts off in electric makers, there’ll be other driving forces behind this coming more and more into fruition. You’re going to see the demand for this product just multiply. These mega-factories and demand is being driven by Asia. The Chinese, Japanese, the Thais, the Koreans. We are ideally placed as a source from a transportation cost.
James West: So is that the over-arching, compelling investment thesis for Ceylon Graphite? That you’ve got the highest quality graphite in proximity to the largest markets and consumers?
Bharat Parashar: Well, that is only part of it.
James West: Okay. There’s more?
Bharat Parashar: Absolutely! We are maybe the quickest to production that there is on the market today. So I talked about K1; I’m at 110 feet. Theoretically, in a few days, I’ll be at the bottom of my shaft, and if I see a vein, I can start digging it out and selling.
Number Two, the big issue is, I have maybe the lowest cost structure in the world for production. So we can get a mine into production of graphite for less than $1 million, and our actual cost of production is a little less than $200 a tonne. Today’s graphite price of high quality graphite is close to $2,000. So you can see what numbers I have.
We’re looking at $50 million, $60 million of top line in a relatively short period of time. So we’re going to start growing. We have money to develop our mine initially. We aren’t in a situation today where every step of the way I’ve got to go look for bank project financing; I don’t think I’m going to look for anything till I build an anode factory, which is going to be real dollars.
James West: I see. And that’s the plan?
Bharat Parashar: That’s our plan. Our plan is actually to get graphite out of the earth, to store it, then process it, and put it up for an anode factory. That’s the big picture.
James West: Great. All right, let’s leave it there. We’ll come back to you shortly and see how you’re making out. Thanks for your time today, Bharat.
Bharat Parashar: Thank you very much for having me.
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