International Graphite Ltd (ASX:IG6) has gained recognition from Peloton Capital for its forward-looking proposed business model of ethically sourced, vertically integrated, downstream graphite production, garnering a speculative BUY recommendation from the financial advisory firm.
International Graphite is developing Western Australia’s first fully integrated mine-to-market graphite business, with a focus on producing a new source of battery anode material for technologies needed to transition to a low-carbon renewable energy system.
The company intends to source graphite from its own Springdale graphite mine, which holds a JORC inferred resource of 15.6 million tonnes at 6% total graphite content (TGC), with a high-grade zone of 2.6 million tonnes at 17.5% TGC
Peloton’s analysis
Peloton emphasises the benefits of IG6’s proposed commercial downstream graphite processing business as one of the reasons for its recommendation – which will supply specialised graphite products for industrial applications and battery anode material (BAM) for the global battery and energy storage industries.
The advisory firm also highlights International Graphite’s management team, which boasts “unique innovative experience in graphite production and downstream graphite processing” according to Peloton, in the form of chair Phillip Hearse and director David Pass, complemented by mining experience provided by board members Matt O’Kane and Andrew Worland.
Hearse and Pass are both experienced in graphite metallurgy and process engineering due to their years as owner-operators of a leading private firm, successfully assisting numerous listed and private graphite companies in undertaking definitive feasibility studies on graphite production and downstream graphite processing.
The company’s formation couldn’t have come at a better time – demand for high-quality graphite products is at an all-time high, especially in the energy storage and electric vehicle industries, where demand is forecast to well outstrip global supply capacity from 2023.
Given both the state and federal Australian governments have committed to creating an onshore battery material supply chain, IG6 is considered well positioned to “attain ‘supply chain custody’ assurance for its future customers”, a priority for the company.
“We place a Speculative BUY on IG6 anticipating that we will see a steady flow of positive news over the coming weeks as the company provides updates on the progress of the development of the Collie R&D operations with commissioning slated next quarter,” Peloton Research said in its report
“Additionally, we anticipate a series of positive updates from resource development and mining feasibility studies at Springdale running in parallel with Collie.”