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Independent Reviews for Venture Investors

CYL.V - Progress.

Ceylon Graphite Corp (CYL.V) specializes in lump vein graphite. CYL.V hold high purity graphite assets in Sri Lanka.

Coverage was initiated on January 2018 with notes on July 2018 and January 2019. Here's an update on the activities

Apr. 22 - Stands With Sri Lanka. Also shares that none of its employees were directly affected by the blasts and work continues as normal K1.

May 15 - Announces New Discovery M1. Site discovery of a new, natural crystalline graphite vein over 30 cm in width, 10 feet downhole at its M1site in the Malsiripura area in Sri Lanka. CYL.V hope to start producing at M1 by the fourth quarter.

The Company also announces it has awarded 100,000 share options to each of its Non-Executive Directors. In addition, the Company announces that it has elected not to proceed with its proposed share for debt transaction, as previously disclosed in its January 16, 2019 press release.

June 3 - M1 Site “New” Vein one of the largest in Sri Lanka. Further to its report on the 14th of May 2019, the needle type crystalline graphite vein it discovered 10 feet downhole at its M1 site in the Malsiripura area in Sri Lanka has increased 2x in size with depth.

The discovery of the widest graphite vein found to date was made in the course of driving a new ventilation shaft at the M1 site and has continued to grow in width as the digging progresses deeper into the rock.

July 2 - Another Large Discovery and 99.9997% Cg Battery Ready Crystalline Graphite Confirmed With Testing. Another large new discovery of a 55cm (1ft 6inches) wide crystalline graphite vein at its H1 site, in Meewitiya, Sri Lanka. All four existing work sites, K1, M1, P1 and H1, have demonstrated large commercially-mineable graphite.

Also announced that American Energy Technologies Company has tested samples of graphite from the K1 and M1 sites and has certified that through simple Thermal Purification these samples can easily be upgraded and meet the specifications of marketable battery grade graphite.

K1 graphite was upgraded to 99.9997wt% Cg and M1 graphite to 99.996 wt% Cg with very little cost incurred.

July 2 - IIROC Trading Halt.

July 3 - Retraction and Correction to News Release Dated July 2, 2019. The Company has only received exploration rights for its mineral properties (121) in Sri Lanka, has not yet received any mining permits for such properties, and has not, to date, performed a NI 43-101 compliant preliminary economic assessment, pre-feasibility study, or feasibility study, to support the technical feasibility or economic viability.

As such the Company specifically retracts the following disclosure: a) “… demonstrated large commercially-mineable graphite.” b) “… samples can easily be upgraded and meet the specifications of marketable battery grade graphite”; c) “… confirm Ceylon Graphite’s near-term goal of producing a premium grade marketable battery grade product for prospective lithium-ion battery manufacturers and other energy storage end-users.”; d) “… and already we can be confident we may be the quickest-to-market new producer, with the highest quality graphite at the lowest costs seen in today’s market. We expect to be in commercial production imminently,” he added. “I am very confident Ceylon Graphite will have a significant impact on the graphite and lithium ion battery sectors in 2019 and beyond.”

The Company would also like to clarify disclosure relating to statements regarding the purification of its graphite samples: Ceylon commissioned American Energy Technologies Company (“AETC”) to test samples of graphite from the K1 and M1 sites. AETC has certified that through simple Thermal Purification procedures, the graphite samples could be upgraded and meet the specifications of marketable battery grade graphite for lithium-ion battery manufacturers and other energy storage end-users, which is currently set at 99.99wt%. K1 graphite was upgraded from 87.19wt% Cg to 99.9997wt% Cg, and M1 graphite was upgraded from 91.22 wt% Cg to 99.996 wt% Cg. Thermal Purification techniques are among the most cost effective techniques used in the graphite industry to purify graphite mineralized material.

July 4 - IIROC Trading Resumption

Aug. 2 - JADs Enterprises (PVT) Ltd has been awarded an IMLB license. JADs Enterprise (PVT) Ltd, a subsidiary of CYL.V, has received a licence from the Industrial Mining License (IML) from the Geological Survey and Mines Bureau (“GSMB”) of the Government of Sri Lanka for it’s M1 site.

IML is an Industrial Mining License issued by the GSMB under the Mines and Minerals Act no 33 of 1992. Under category B, typically some single borehole blasting is permitted plus the use of certain machinery and equipment is permitted in the mining process. The site in question may also excavate/produce a small amount of graphite per month.

“This is another step in the right direction,” said Bharat Parashar, Chief Executive Officer. “The license will allow us to speed up mine development work at M1 as we apply for a IMLA license, a process that has already started.

Aug. 21 - Obtains Environmental Clearance for K1 - wholly owned subsidiary Sarcon Development (Pvt) Ltd has received Environmental Approval for its K1 Graphite Mining Project at Karasnagala, Sri Lanka. The approval lays out the basic terms under which the mine may be operated.

“The Industrial Mining License A should follow shortly as Environmental Approval was the last approval required by the Geological Survey and Mines Bureau, the mining regulator in Sri Lanka". We will be able to commence commercial production once the IMLA is granted.” -CYL.V's CEO.

CYL.V started the day with a 50% decline of its stock price in the last seven months. However, valuation was not reflective of it achievements. CYL.V reported new discoveries at M1 (May 15, June 3) and H1 (July 2 & 3) which adds to the previous one at K1 (August 28, 2018) and H1 (December 7th 2018).

The July 2 news release, requested a correction by IIROC. The corrective response from CYL.V was issued on July 3 and it resumed trading on July 4.

The test results on K1 and M1 sites from American Energy Technologies Company (AETC) were another accomplishment. AETC certified that through Thermal Purification, the K1 and M1 graphite samples can be upgraded and meet the specifications of marketable battery grade graphite for lithium-ion battery manufacturers and other energy storage end-users, which is currently set at 99.99wt%.

As a reminder, CYL.V previously used Dorfner Anzaplan for K1 which confirmed that CYL.V"s material meets the parameters of spherical graphite required for battery and energy storage applications. K1 material has been was now tested by both entities.

CYL.V recently reported (Aug. 2) obtaining an Industrial Mining B License for its M1 site. Today, it received environmental approval for on K1.

Back in January 2018, CYL.V reportedly aimed to receive K1 environmental approval by the end of Q1 2019 and M1 by the end of the Q2 2019.

Thus, while there has been delays CYL.V has executed on what it set out to do.

Hence, it comes to no surprise that a correction in valuation occurred today. However, volume is still relatively low and CYL.V has yet to make a thorough impression on the market because the economic potential is yet to be articulated.

On our last note we indicated that potential catalyst were a) Articulation of cumulative volume (capacity) for K1 and M1, b) Processing and marketing partnership, and c) Off take agreements. However, the advancement made in the last period indicate progress.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.


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