Northern Graphite halts operation for repair

Northern Graphite (TSXV: NGC; US-OTC: NGPHF) says it has temporarily halted its Lac des Iles (LDI) mine and mill to address an unexpected equipment issue and advance planned maintenance and development work ahead of its pit expansion next year.

The decision follows a bearing failure at the mill, a long-lead-time component with a replacement window of about four to six weeks, the Canadian graphite developer said in a news release Thursday. A replacement part has already been ordered.

However, the miner has gone a few metres too deep in a pit for the current permit and said getting a new approval may cause a two-to-three-month gap between existing operations and production from the expanded pit. 

Shares of Northern Graphite fell by 4.7% to close at 20¢ apiece on Thursday, bringing its market capitalization to $29.5 million.

Maintenance

While it completes the repair, the company plans to conduct maintenance and repair projects at LDI that had originally been scheduled for January. They’re designed to support the transition to mining from the new pit.

“Rather than stopping the plant now and again in January, we decided to start the maintenance program immediately in order to avoid having two separate shutdowns,” Northern Graphite CEO Hugues Jacquemin said.

First production from the expanded pit could come as soon as the second quarter of 2026, Northern Graphite said, noting that it is now in the final stages of permitting with the Quebec environmental ministry for the stage one expansion.

The permit would allow mining down to 203 metres above sea level, compared with the current limit of 209 metres, about 10 metres above the water table. Northern Graphite said it has already reached that depth and inadvertently mined slightly below it, prompting a temporary halt while it confirms there were no adverse impacts.

The company will seek a minor amendment to its certificate of authorization to mine the remaining ore to 203 metres.

35 years

Located about 150 km northwest of Montreal, LDI has been in operation for 35 years, serving primarily industrial clients in the U.S., from steelmaking refractories to heat management in electronics and friction materials for the global automotive sector.

Currently the only graphite mine in North America, it produces around 15,000 tonnes of concentrates per year, but has the installed capacity to produce up to 25,000 tonnes annually. Pre-stripping activity is now underway as part of the expansion’s first stage. It could potentially add eight years to the mine life by opening a new pit.

The Canadian government is covering 75% of the expansion costs by providing around $6.22 million in interest-free, repayable contribution. The funding, announced in late August, also allowed Northern Graphite to keep LDI in operation. Before that, the company had considered shutting it down by year-end without sufficient funding for the planned expansion.

The pit extension is based on the mine’s resource published in January 2024 which outlined 3.3 million indicated tonnes at an average grade of 6.4% graphitic carbon (Cg), containing around 213,000 tonnes of Cg, plus 1.4 million inferred tonnes averaging 7.4% Cg containing approximately 106,000 tonnes Cg.