Ceylon Graphite Corp (CYL.V) specializes in lump vein graphite. CYL.V hold high purity graphite assets in Sri Lanka. We initiated coverage on January 2018 with a subsequent note on July 2019. Here's an update of the releases issued since:
July 17 - 30 Kilograms of CYL’s Graphite Being Tested. High carbon (Cg) content (90%+) natural graphite from its K1 mine site was sent to Dorfner ANZAPLAN for advanced testing. The proposed test targets evaluating 1) Spheroidization and purification of vein graphite 2) Electrochemical characterization and 3) Evaluation of expandability.
Aug. 24 - Signs Three New Land Agreements on Assay Results Showing 96.13% Pure Graphite Carbon Content from Grid 23 Samples. The laboratory testing was done by the Sri Lanka Government’s Geological Survey and Mines Bureau’s laboratory.
Signed three new land agreements under Exploration Licenses 222 and 224 and is accelerating its exploration, and commencing a drilling program on the recently added site(s) to determine an additional resource estimate, in addition to its currently verified ore holdings.
Aug. 28 - Announces New Discovery of Untapped Natural Graphite Veins. One vein of 28 cms wide at 66.8 meters and another 10 cm wide at 71.5 meters at its K1 site in the Karasnagala area in Sri Lanka. These veins were discovered in the normal course of drilling at the K1 site and samples from the discovery have been sent to the Sri Lanka Government’s Geological Survey and Mines Bureau’s laboratory for testing.
Ceylon Graphite now has 6 large sized veins at its K1 site. The Company anticipates that there are additional similar sized or larger veins at lower depths and continues to actively pursue its exploration and production plans for the K1 site and expects to receive a mining license for K1 shortly.
Sept. 12 - Announces Best Ever Assay Results. The assay test results of samples from the large untapped natural graphite vein discovered in late August 2018 at its K1 site in the Karasnagala area in Sri Lanka. 97.61% pure carbon.
Sept. 27 - Confirms Marketable Battery Grade Graphite. Dorfner ANZAPLAN has certified that graphite obtained from its K1 site is upgradeable and meets the specifications of marketable battery grade graphite with a final carbon content of 99.96 wt -%.
Oct. 2 - Resource Estimate at the Malsipura Project Shows Significant Economic Value. The Technical Report was prepared in accordance with the requirements of National Instrument 43-101- Standards of Disclosure for Mineral Projects (“NI 43-101”).
Nov. 5 - Receive DTC Eligibility. The Depository Trust Company (DTC) eligibility for CYL.V in the United States will be under the symbol CYLYF.
Nov. 6 - Ceylon Graphite Tops Spherical Graphite Parameters. Dorfner ANZAPLAN has certified graphite obtained from its K 1 exploration site meets the parameters of spherical graphite required for battery and energy storage applications.
These tests conducted by ANZAPLAN over the last month confirm Ceylon Graphite’s end goal of producing premium battery grade spheroidized product for prospective lithium-ion battery manufacturers and other energy storage end-users.
Dec. 7 - Announces New Discovery at Hakbewa Site. Natural crystalline graphite veins over 15cms in width between 68.93 meters and 69.53 meters downhole at its H1 site in the Hakbewa area in Sri Lanka Discovered in the normal course of drilling at the H1 site.
Samples from the discovery have been sent to the Sri Lanka Government’s Geological Survey and Mines Bureau’s laboratory for testing.
Jan. 16 - Ceylon Graphite – The Past (2018) and the Future (2019).
The future (2019) - File EIA (Environment Impact Analysis) or IEE (Initial Environment Examination) with the Central Environmental Authority of Sri Lanka to obtain an Environmental Protection License (EPL) for the K1 site by the end of the first quarter and for the M1 site by the end of the second quarter of 2019. The EPL will allow the GSMB to provide CYL.V with an IML/A license to start commercial production at the K1 and M1 sites respectively. Develop a processing capability in Sri Lanka and establish marketing partnerships for high quality upgraded graphite. Establish tangible long-term contracts with the battery/energy storage equipment manufacturers. Expand the exploration work to at least three new sites.
Bharat Parashar, Chief Executive Officer. “Battery and other energy storage equipment manufacturers want our material. They have seen samples and like what they see but want it in volume now. It is now up to us to meet these expectations and I am confident we can.”
CYL.V also announces it has entered into a share for debt arrangement: will issue 0,38M shares at $0.20 per share to settle a debt of $0.076M.
In the last six months, CYL.V has made progress on many fronts. It received positive test results of its product (Sri Lanka Government’s agencies & Dofner Anazaplan), it made a number of new discoveries, and expanded (with three new locations) while continuing to advance work on K1 and M1 sites.
Of note in the chart, the market reacted to the initiation of material testing (late July). Subsequently valuation briefly jumped at the confirmation by Dofner ANAZAPLAN's approval and filing of N-43-101 (Late September to October). CYL.V surprised the market positively with the N-43-101 filing as it previously reported not pursuing this avenue. While valuation returned to previous levels, CYL.V has maintained its valuation to date.
However, volume is still relatively light. CYL.V is still not getting the full market attention primarily because the economic potential is yet to be articulated in dollars and cents. The comment made by the CEO in the last release suggests that CYL.V is aware of this and is working on resolving it. CYL.V still has work to do but for the most part is mostly on scheduled with the plan it presented in the past year.
Potential catalyst for the upcoming period are a) Articulation of cumulative volume (capacity) for K1 and M1, b) Processing and marketing partnership, and c) Off take agreements. Should CYL.V not conduct a formal PEA, it will have to extract and stock pile its assets and communicate quantities with the market. In its latest investor presentation, CYL.V reports a fair market value of $72.5M USD - this will need to be substantiated.
For now, it is evident that CYL.V has been in accumulation for the past six month and maintaining its valuation despite the current market conditions.
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