Open pit operation Cal Graphite prepares for production

Work is gearing up at Cal Graphite Corp.’s Graphite Lake property near Huntsville, Ont., with production scheduled to begin late in October.

About one-third of the mining and milling equipment has been purchased and the company reports its 5,000-ton-per-day mill will be ready by the fall. An access road and tailings dam will also be built.

Work has indicated 29.5 million tons of proven reserves amenable to open pit mining with a 1:1 stripping ratio (N.M., Oct 26/87).

Using funds raised in a recent flow-through share financing, the company has embarked on a $1.1- million program to increase these reserves. The program will concentrate on a newly acquired adjacent property where surface work suggests additional tonnage potential.

Cal Graphite will produce a large crystalline flake graphite product with a carbon content averaging 97.5%. Preliminary results of metallurgical tests indicate the possibility of upgrading the carbon content to more than 99%. Amalgamet Canada, the company’s marketing agent, reports favorable responses from prospective customers who have analyzed product samples.

Working capital at year-end was $2.4 million. The company is debt- free and reports it has a substantial line of credit with its bankers.

A private placement arranged in August, 1987, with a Swiss financial institution provided for the placement of 500,000 common shares at $6.00, with an option till June, 1988, on a further 500,000 shares at $9.00. The final instalment of $600,000 has been received, netting $4.2 million, and the company will get another $4.5 million if the option is exercised.