Superior Graphite Properties Group:
History of the Graphite Properties
These properties are in a known graphite-bearing region of British Columbia. The Geologic Survey of Canada undertook a study in 1965, known as the Reesor Report, which identified the presence of graphite in the area.
The Superior Group
The Company is the legal and registered owner of a total of 7,497 hectares containing graphite in the Slocan Mining Division in the Province of British Columbia .
Claims |
Good Standing |
Hectares |
Tenure Numbers |
| Superior I - XXXII |
April, 2015 |
975 |
348875-347430 |
| Amar - Elie 1-10 |
April, 2015 |
250 |
300990 - 390999 |
| Mother Superior |
April, 2012 |
400 |
365015 |
| Superior XXXIII - XXXVI |
April, 2012 |
1,750 |
360029-360032 |
| Superior 40 |
Oct, 2010 |
167 |
504887 |
| Superior 50 |
Aug, 2010 |
208 |
504883 |
| Koch 1-11, 14 + 15 |
April, 2009 |
1,381 |
504890 |
| Amar Group 1-34 |
Aug, 2008 |
1,965 |
504885 |
| Koch 12, 13 |
Sept, 2007 |
400 |
396526-396527 |
All of these filings are under the supervision of the local prospector who located the claims and acts as a consultant to the Company.
Exploration Highlights
Over the past six years, the Company has expended over $1 million CDN on exploration and drilling on the “Superior Group” of claims. The project is now at an advanced exploration stage.
The engineers, geologists, assayers and consultants who have been on the property and/or worked on the analysis of samples from the property, feel the graphitic inferred reserves have impressive potential and will in all likelihood prove to be a world class deposit in both size and quality.
We are confident that at the conclusion of our drilling programs, we will have in excess of 55,000,000 tons of reserves.
The industry standard for commercial development is 2,400,000 tons with a median grade of 9.0%. Our grades exceed this and our past exploration programs have indicated current inferred reserves of 30,000,000 tons on just 5 of the 7,497 hectares. Given the massive reserves anticipated from these deposits, we project a mine life in excess of 50 years. The mine would operate at an annual run of mine of 450,000 tons at commencement and increase to 1,800,000 tons at peak capacity. These operating levels could generate annual mine revenue from $16 million USD to $28 million USD.
Financial Projections
The following is a snapshot of the minimum financial return anticipated on just 5 of the 7,497 hectares of our mineral claims. These projections are based upon our present inferred reserves of 30 million metric tons with the minimum percentage of graphite recoverable (4.5%) notwithstanding that our present lab results indicate graphitic content from 7.4% to 13.31%.
They also use the market price of $2,500 USD per ton which is at the lower end of the scale for the high grade of our crystal graphite currently trading up to $1,000 USD per ton. Market prices for flake graphite are historically stable with few major spikes.
These projections do not factor in any increase in price due to the anticipated increase in demand arising from fuel cell conversion in the transportation or energy sectors nor increases in lithium-ion battery production.
Management believes that these projections are realistic as minimum recoveries and maximum costs estimates have been used in these computations.
Financial Snapshot: 5 Hectares the Main Zone
| |
20 Years |
6 Years |
1 Year |
| Ore Processed |
30,000,000 m3 |
9,000,000 m3 |
1,500,000 m3 |
| Graphite Recoverable |
1,350,000 m3 |
405,000 m3 |
67,500 m3 |
| Mine Costs |
$ 450,000,000 |
$ 135,000,000 |
$ 22,500,000 |
| Revenue |
$ 3,375,000,000 |
$ 1,012,500,000 |
$ 168,750,000 |
| Gross Revenue |
$ 2,925,000,000 |
$ 877,500,000 |
$ 146,250,000 |
As not all of the units will be explored by that date, there exists the possibility to define even further reserves.
If, as we reasonably anticipate, the reserves increase to 55,000,000 tons then our revenues increase significantly.
Financial Snapshot: 55,000,000 m3
| |
20 Years |
6 Years |
1 Year |
| Ore Processed |
55,000,000 m3 |
16,500,000 m3 |
2,750,000 m3 |
| Graphite Recoverable |
2,475,000 m3 |
742,500 m3 |
123,750 m3 |
| Mine Costs |
$ 825,000,000 |
$ 247,500,000 |
$ 41,250,000 |
| Revenue |
$ 6,187,500,000 |
$ 1,856,250,000 |
$ 309,375,000 |
| Gross Revenue |
$ 5,362,500,000 |
$ 1,608,750,000 |
$ 268,125,000 |
These projections are for the Superior Group and Amar Group of mineral claims. The Company has additional graphite claims called the Koch Group of claims which will undergo exploration next summer.
The Company is exploring multiple production possibilities ranging from production of 3,000 to 10,000 tons per day. Based upon these assumptions, the life of the project is as follows:
Mill Processing
Per Day |
30,000,000 m3
Reserves |
55,000,000 m3
Reserves |
10,000 m3 |
10 years |
18 years |
5,000 m3 |
20 years |
36 years |
3,000 m3 |
33 years |
61 years |
Selected Financial Data and Pro Forma:
Completed Work to Date Presented in $CDN
1997 Acquisition Consideration $1,260,000
1998 Exploration Pearson, Hoffman, BLM Engineering, et al. )
1999 Drilling SNC-Lavelin et al. ) $600,000
2000 Exploration George Addie, P. Eng. et al. )
2001 Exploration and Geological - Main Zone $136,000
2002 Exploration and Geological - Main Zone $140,000
2003 Administration including filing fees and consultations $40,000
2004 Drilling and Testing of samples $150,000 - $175,000
2005 National Instrument 43-101 filed - Stephen B. Butrenchuk, P. Geol.
Work to be Completed
2008 Drilling, environmental assessment, open pit design & plant design
2009 Build out of Mill and infrastructure for production
2010 Production planned to begin Summer 2010
Basic Pro Forma Expressed in USD
The Company intends to mine between 3,000 and 10,000 tons per day for 150 days and to mill between 1,500 and 5,000 tons per day for 300 days.
The cost of mining the ore per ton is $15.00 and the price range per ton of graphite is approximately $2,500 with percentages of graphite ranging between 4.5% graphite per ton to 9.0% graphite per ton.
The tables below show the figures based on these assumptions.
Table 1:
The Company mines 3,000 tons per day for 150 days and mills 1,500 tons per day for 300 days.
|
|
No. |
Tons/ |
Grade |
Graphite |
Price |
Income |
Expense |
Gross |
| Milling |
| Tons/ |
Of |
Year |
% |
Tons/ |
$ |
$ |
$15 / Ton |
Profit $ |
| Day |
Days |
|
|
Year |
Ton |
|
|
|
| 1,500 |
300 |
450,000 |
4.50% |
20,250 |
2,500 |
50,625,000 |
6,750,000 |
43,875,000 |
| 1,500 |
300 |
450,000 |
5.00% |
22,500 |
2,500 |
56,250,000 |
6,750,000 |
49,500,000 |
| 1,500 |
300 |
450,000 |
5.50% |
24,750 |
2,500 |
61,875,000 |
6,750,000 |
55,125,000 |
| 1,500 |
300 |
450,000 |
6.00% |
27,000 |
2,500 |
67,500,000 |
6,750,000 |
60,750,000 |
| 1,500 |
300 |
450,000 |
6.50% |
29,250 |
2,500 |
73,125,000 |
6,750,000 |
66,375,000 |
| 1,500 |
300 |
450,000 |
7.00% |
31,500 |
2,500 |
78,750,000 |
6,750,000 |
72,000,000 |
| 1,500 |
300 |
450,000 |
7.50% |
33,750 |
2,500 |
84,375,000 |
6,750,000 |
77,625,000 |
| 1,500 |
300 |
450,000 |
8.00% |
36,000 |
2,500 |
90,000,000 |
6,750,000 |
83,250,000 |
| 1,500 |
300 |
450,000 |
8.50% |
38,250 |
2,500 |
95,625,000 |
6,750,000 |
88,875,000 |
| 1,500 |
300 |
450,000 |
9.00% |
40,500 |
2,500 |
101,250,000 |
6,750,000 |
94,500,000 |
Table 2:
The Company mines 6,000 tons per day for 150 days and mills 3,000 tons per day for 300 days.
|
|
No. |
Tons/ |
Grade |
Graphite |
Price |
Income |
Expense |
Gross |
| Milling |
| Tons/ |
Of |
Year |
% |
Tons/ |
$ |
$ |
$15 / Ton |
Profit $ |
| Day |
Days |
|
|
Year |
Ton |
|
|
|
| 3,000 |
300 |
900,000 |
4.50% |
40,500 |
2,500 |
101,250,000 |
13,500,000 |
87,750,000 |
| 3,000 |
300 |
900,000 |
5.00% |
45,000 |
2,500 |
112,500,000 |
13,500,000 |
99,000,000 |
| 3,000 |
300 |
900,000 |
5.50% |
49,500 |
2,500 |
123,750,000 |
13,500,000 |
110,250,000 |
| 3,000 |
300 |
900,000 |
6.00% |
54,000 |
2,500 |
135,000,000 |
13,500,000 |
121,500,000 |
| 3,000 |
300 |
900,000 |
6.50% |
58,500 |
2,500 |
146,250,000 |
13,500,000 |
132,750,000 |
| 3,000 |
300 |
900,000 |
7.00% |
63,000 |
2,500 |
157,500,000 |
13,500,000 |
144,000,000 |
| 3,000 |
300 |
900,000 |
7.50% |
67,500 |
2,500 |
168,750,000 |
13,500,000 |
155,250,000 |
| 3,000 |
300 |
900,000 |
8.00% |
72,000 |
2,500 |
180,000,000 |
13,500,000 |
166,500,000 |
| 3,000 |
300 |
900,000 |
8.50% |
76,500 |
2,500 |
191,250,000 |
13,500,000 |
177,750,000 |
| 3,000 |
300 |
900,000 |
9.00% |
81,000 |
2,500 |
202,500,000 |
13,500,000 |
189,000,000 |
Table 3:
The Company mines 10,000 tons per day for 150 days and mills 5,000 tons per day for 300 days.
|
|
No. |
Tons/ |
Grade |
Graphite |
Price |
Income |
Expense |
Gross |
| Milling |
| Tons/ |
Of |
Year |
% |
Tons/ |
$ |
$ |
$15 / Ton |
Profit $ |
| Day |
Days |
|
|
Year |
Ton |
|
|
|
| 5,000 |
300 |
1,500,000 |
4.50% |
67,500 |
2,500 |
168,750,000 |
22,500,000 |
146,250,000 |
| 5,000 |
300 |
1,500,000 |
5.00% |
75,000 |
2,500 |
187,500,000 |
22,500,000 |
165,000,000 |
| 5,000 |
300 |
1,500,000 |
5.50% |
82,500 |
2,500 |
206,250,000 |
22,500,000 |
183,750,000 |
| 5,000 |
300 |
1,500,000 |
6.00% |
90,000 |
2,500 |
225,000,000 |
22,500,000 |
202,500,000 |
| 5,000 |
300 |
1,500,000 |
6.50% |
97,500 |
2,500 |
243,750,000 |
22,500,000 |
221,250,000 |
| 5,000 |
300 |
1,500,000 |
7.00% |
105,000 |
2,500 |
262,500,000 |
22,500,000 |
240,000,000 |
| 5,000 |
300 |
1,500,000 |
7.50% |
112,500 |
2,500 |
281,250,000 |
22,500,000 |
258,750,000 |
| 5,000 |
300 |
1,500,000 |
8.00% |
120,000 |
2,500 |
300,000,000 |
22,500,000 |
277,500,000 |
| 5,000 |
300 |
1,500,000 |
8.50% |
127,500 |
2,500 |
318,750,000 |
22,500,000 |
296,250,000 |
| 5,000 |
300 |
1,500,000 |
9.00% |
135,000 |
2,500 |
337,500,000 |
22,500,000 |
315,000,000 |
|
|
|
