Peninsula Mines Ltd (ASX:PSM) is focused on positioning itself to capture maximum value within the graphite production and downstream processing chain in south Korea - the world’s largest producer of lithium-ion (graphite) battery technology.
It aims to do this by advancing its Korean flake-graphite projects to resource delineation and development and, at the same time, securing supply of high-quality, low cost, graphite from other sources.
This will allow Peninsula to establish off-take agreements with Korean graphite end users in the Li-ion battery and other high-technology graphite markets.
Extracting the maximum value from the supply chain
Battery grade flake - graphite attracts a premium price due to its use in lithium-ion battery anodes, which are produced in south Korea.
The production and downstream processing of graphite, from mine to value-added product for Li-Ion battery anodes, can be summarised in four stages:
Korea was a world-leading graphite producer in the 1970’s, but currently has no active graphite mining or downstream processing in-country.
Peninsula has established several flake-graphite projects in south Korea and aims to position itself so it can supply Korean end users with battery grade and other value-added flake-graphite products such as expandable graphite for non-flammable building materials.
Multi-commodity portfolio of projects in Korea
Peninsula is advancing a series of mineral resource projects in south Korea targeting two groups of commodities, graphite and lithium, and base and precious metals.
Peninsula’s key projects in south Korea include:
• Flake graphite: Yongwon, Daewon, Eunha and Gapyeong;
• Lithium: Tonggo;
• Polymetallic: Ubeong; and
• Gold-silver: Osu.
South Korea is a major end-user of high-tech commodities
South Korea is the world’s largest lithium-ion battery manufacturer.
The country is highly prospective for graphite and was a leading producer up until the 1980s.
Peninsula is establishing offtake agreements with Korean end-users at the same time as advancing the development of projects to meet the end-users demands and specifications.
Projects have high-value flake-graphite potential
Peninsula has completed petrography showing large to jumbo flakes of graphite at the Yongwon, Daewon, Eunha and Gapyeong Graphite Projects.
Grind and flotation tests on 50-kilogram samples from Yongwon and Daewon produced results suggesting the graphite may be suitable for lithium-ion battery spherical graphite production.
Yongwon flotation results showed 97% total graphitic content (TGC) concentrate with 87.3% recovery and Daewon results showed 96.6% TGC with 81.8% recovery.
In addition, metallurgy is in progress for the Eunha and Gapyeong flake-graphite projects and spherical graphite testing is planned to confirm the battery grade of the Korean graphite.
Upcoming drilling planned for the Korean flake-graphite projects will be targeting maiden JORC graphite resources for future development.
Signed off-take and development cooperation agreement
In January 2018, Peninsula signed a binding large-flake graphite supply agreement with DNI Metals (CNSX:DNI).
Under the agreement DNI Metals will supply up to 24,000 tonnes per annum of large-flake graphite from its Madagascar projects.
This enables the company to advance towards off-take agreements with Korean manufacturers of lithium-ion batteries and other high-technology large flake graphite applications such as expandable graphite for non-flammable building cladding products.
READ: Peninsula Mines looks to shore up graphite offtake agreements with Korean end-users
In June 2017, Peninsula also signed a memorandum of understanding (MoU) with Korean expandable graphite producer, Graphene Korea Co. Ltd.
The MoU envisaged long-term strategic cooperation with respect to off-take of graphite concentrate and development of graphite mining and processing projects both within and potentially outside Korea.
Fully funded for planned diamond drill program
Peninsula is fully funded to carry out its planned 2018 program of diamond drilling and geophysical and geochemical sampling to define additional drill targets.
The funding will also enable metallurgical testing and progress towards off-take agreements with Korean end-users.
The company recently secured $2 million in funding via a share placement.