DNI Metals (DNI-V) and Great Lakes Graphite (GLK-V) have clarified their five-year agreement through which Great Lakes will buy 34,000 tonnes of graphite from DNI. Mr. Weir, CEO of DNI and Mr. Gorman, CEO of Great Lakes and a director of DNI, say that before their two companies struck the deal, DNI had "made arrangements with a well-established large-flake graphite producer in South America" to wholesale graphite to customers in North America.
Curiously, Mr. Weir never mentioned those arrangements to his shareholders. He did tell them that DNI had a tentative deal to acquire a graphite property in Madagascar, and a day after the deal with Great Lakes he said that DNI had just signed a letter of intent for a Brazilian graphite project. Still, there was no sign that either of those tentative acquisitions was on the cusp of production. In fact, the only definitive deal of the three DNI arrangements appears to be its sales agreement with Great Lakes. The latter company needs the graphite for its new facility in Matheson, east of Timmins. Mr. Gorman says the plant, which will produce micronized flake graphite, should be in operation later this year.
Meanwhile, Great Lakes Graphite jumped 1.5 cents to eight cents on 3.47 million shares following word that samples of lump graphite occurring in some of the veins at its Lochaber deposit in southwestern Quebec have assayed as high as 98 per cent. Unfortunately, bad news accompanies the good. Mr. Gorman has been variously describing a long-awaited resource estimate for Lochaber as "under way," "nearing completion" and "upcoming." Delayed now seems a better word. Mr. Gorman, who had just hours to hit his end-of-the-month deadline, now says that the news regarding the high-grade lump graphite will "necessarily extend the target date" for the resource estimate. He promises the delay will be just "a matter of several weeks and not months," hopefully adding that his company's shareholders are "highly supportive" of his efforts to build long-term value. Investors certainly were supportive of his news today, but several weeks usually do add up to a few months and on Howe Street at least, support can be fleeting. |
