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SRK.V |
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Strike Graphite Corp. (TSX-V: SRK) (OTC: SRKZF) (Frankfurt: QSG) is advancing three graphite properties in stable mining friendly jurisdictions of Canada. SRK.V is positioned to be among first in the sector to achieve a sizeable large flake graphite resource in a market where industrial users of graphite are now realizing the need to secure proprietary sources. SRK.V has a market cap under $17M and Mining MarketWatch Journal estimates the Company is only ~$5M in exploration and soft cost efforts away from achieving a resource by the end of Q3 2012 (assuming planned exploration efforts/drilling continue to affirm and build on historic findings as expected) at its Simon Lake graphite property in Saskatchewan.
Airborne EM survey of the Simon Lake graphite property reveals that it is host to a 25 km conductor understood to be as a result of the strong presence of graphite (graphite is one of the most conductive substances on the planet and the conductors can literally be nothing else when you are looking at these geophysical images). Initial drilling (see related May 2, 2012 entitled " Strike Graphite Intersects Significant Graphite at Simon Lake Graphite Property") affirms significant graphite. SRK.V is targeting a potential resource of 30 million tonnes of 10+%Cg coarse grain large-flake graphite within the best 2km stretch (less than 10% of the total conductive length). Mining MarketWatch Journal's 30M tonne projection (non 43-101) is based on historic drilling which intersected in excess of 50m width with visual estimates of coarse grain large flake graphite ranging up to 70+%, the potential to open pit down to 100m depth, and a specific gravity of 3. By twinning some holes and drilling the most prospective conductor targets confidence is high Simon Lake may be advanced to resource in short order. Strike's other Saskatchewan graphite property, Deep Bay East, is also expected to be rapidly advanced to resource; the drill holes and trenches at Deep Bay East are spread all along the 1.6 km conductor and SRK.V is targeting an initial 10 million tonnes of 10% Cg. With prices for large flake graphite close to US$3,000 per tonne and a concern for graphite supply chain interruptions on the horizon for industrial end uses, the prospects for SRK.V shareholders appear highly favorable as it rapidly advances its graphite projects.
Junior miners with graphite prospects of merit can look forward to keen interest from potential industrial suitors looking to secure the commodity via offtake partnerships or buyouts. The fear of possible supply chain interruption is a motivator for major industrial end users to take preemptive measures and ensure they are strategically involved now. The revolutionary nature of newer technological uses for flaked graphite not only ensure a ‘demand’ but rather a ‘cultural push’ that will forever change the future of several technologies as we know it and a tight supply market carries risk for end industrial users of graphite. Emerging technological uses include lithium-ion batteries (there is up to 30 times more graphite than lithium in a lithium-ion battery), fuel cells, nuclear & solar power, heat sinks in computers, flexible graphite (Grafoil), and future uses of graphene in electronics. Capital investment now in the form of strategic partnerships (or outright buyouts) are minimal in cost to major industrial users in comparison to risk of loss by not taking action to protect the billions of dollars of sales in which graphite is an integral component. However, what is minimal to major industrial manufacturers would translate to a windfall for shareholders of Strike Graphite Corp.
 Shares outstanding: 39,608,653 (~45M fully diluted). These are early days and the movement in graphite is in its infancy, shares of SRK.V near 40 cents (only ~17M market cap) have the potential for significant upside revaluation. The recent EM survey affirms the near-term likelihood of a flake graphite resource of significance for SRK.V at Simon Lake by the end of Q3 2012 and typically in the mining business when supply-criticality is an issue, as is certainly the case with graphite, the 'first to resource' gets the highest valuations and best opportunities (via offtake, financing through development and JV's). The current market cap of SRK.V relative to the inherent value of their projects appears disproportionate and presents opportunity for those establishing a long position now.
Company Website: www.strikegraphite.com
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