Ceylon Graphite Races to Meet Growing Battery Graphite Demand

• CEO Don Baxter visited the graphite mines in Sri Lanka and was impressed with the technical team and education system producing skilled geologists and engineers. They are sinking the shaft deeper at the K1 mine to increase production.
• Baxter aims to have 10 or more mines producing graphite in Sri Lanka to reach target production levels of 50,000-100,000 tons per year over 5 years. The veins are high grade and run for kilometers deep.
• Initial battery tests show Sri Lankan vein graphite performs very well, with capacities above theoretical limits for flake graphite. This is attracting interest from OEMs for offtake agreements.
• Ceylon Graphite incorporated in the UK to access funding and build processing facilities and R&D capabilities for making battery materials, capitalizing on relationships with researchers in Cambridge.
• The company needs to raise capital for mine development and increase resources to prove scale potential to OEMs. Goal is to be producing graphite and making sales in 2022 from the K1 and M1 mines.

About Ceylon Graphite

Ceylon Graphite is a mining and battery materials company focused on developing high grade vein graphite mines in Sri Lanka to produce advanced battery anode materials. The company holds over 120 square kilometers of mining grants in Sri Lanka and is currently focused on bringing several past-producing mines into production. Ceylon aims to produce 50,000-100,000 tons per year of high performance battery graphite to supply the rapidly growing lithium-ion battery industry.

Progress on the GroundIn a recent interview, Ceylon Graphite CEO Don Baxter discussed his recent visit to the company's Sri Lankan mines and provided an update on progress. Baxter was pleased with the technical capabilities of the local team and the potential to utilize more modern mechanized mining techniques to increase production. At the K1 mine, Ceylon is currently sinking the main shaft over 25 meters deeper to reach higher grade veins, with production from the lower levels expected within 3-4 months.

The nearby M1 mine also shows potential for multiple parallel graphite veins that could be developed into 3 separate mines (M1A, M1B, M1C). With the ability to rehabilitate old workings and the large extent of graphite mineralization, Baxter sees potential for Ceylon to develop 10 or more mines in the coming years. Ongoing exploration and resource modeling will be key to fully determining the scale potential.

Interview with Donald Baxter, CEO of Ceylon Graphite

Strong Battery Test Results

Recent battery test work on Ceylon's graphite has demonstrated excellent performance - achieving capacities over 380 mAh/g, above the theoretical limit for natural flake graphite. This positions the high purity vein graphite exceptionally well for use in lithium-ion battery anodes. Ceylon is also working on enhancing performance further through silicon modifications to the graphite.

Additional testing is underway at the University of Warwick to produce full pouch cell batteries using Ceylon's graphite. The company is setting up facilities at Warwick to allow for more rapid materials development and testing.

Securing Offtake Agreements

With strong technical results in hand, Ceylon Graphite is now focused on securing offtake agreements with battery and EV manufacturers who are looking to shore up long-term graphite supplies. Conversations are underway, but the company needs to demonstrate it can produce sufficient volumes before any contracts can be finalized.

Baxter sees potential for strategic investors or joint venture partners to help fund expanded development, allowing for more rapid scale-up of production. The updated resource model and feasibility studies will help provide the information needed to bring in such partners.

The Road Ahead

Ceylon Graphite has a clear path forward: continue advancing mine development at K1 and M1 to demonstrate production potential; update resource modeling with 3D vein modeling; complete feasibility studies; and pursue strategic partnerships and offtake agreements to fund expanded production.

With demand for natural graphite growing rapidly, Ceylon Graphite is positioning itself to take advantage of the opportunity. But it remains a relatively early stage company that needs to execute successfully to realize that potential. Risk-tolerant investors may see strong upside if execution goes well, but will need patience as the company progresses through development hurdles.

Conclusion

Ceylon Graphite has a unique opportunity with high grade vein graphite deposits in a jurisdiction with an established graphite mining history. If the company can successfully scale up production over the next 2-3 years to meet rapidly growing lithium-ion battery demand, it could generate strong returns for early stage investors. However, typical mining risks around capital requirements, execution challenges, and market fluctuations remain. Ceylon Graphite is one to watch in the natural graphite space.