Agoracom Blog

Flinders financing set to fund restart of graphite mine in Sweden

Posted by AGORACOM-JC at 7:24 AM on Tuesday, March 27th, 2012

Graphite has been a hot commodity of late and one Canadian junior looks to have capitalized on market sentiment through a proposed C$15 million financing.

Posted:  Monday , 26 Mar 2012


After Flinders Resources (TSX-V: FDR) said it would raise C$15 million in a private placement on Monday morning, its shareprice leapt by more than a third in the first minutes of trading to as high as C$2.75.

It settled down soon thereafter, but was still well up by 19 percent to C$2.24 as of presstime late in the trading day. Share volume was strong over 1.5 million.

The private placement Flinders outlined was set at C$1.70 a unit with each unit comprising a share and a half-share purchase warrant @ C$2.20.

That Flinders shareprice revved well above the private placement purchase price suggested the appetite to get into Flinders stock and by extension its flagship graphite project in Sweden was hearty.

Graphite has recently caught a fair amount of attention. There were a noticeable number of graphite stories on display at the recent Prospectors and Development Association convention in Toronto, suggesting juniors are increasingly attuned to it as an investment story.

The reason for the buzz is a simple matter of price. Higher quality graphite especially, used in products as batteries and solar panels, has more than doubled in price in the past couple years.

Flinders’ chief selling point is that it owns a permitted past-producing graphite mine in Sweden, called the Kringel mine, which it could have up and running within two years, it has said. There it lists historic resources of 6.9 million tonnes @ 8.8 percent carbon.

“Importantly, with Kringel at such an advanced stage of development, the cost of re-starting operations will be relatively modest and this $15 million financing is expected to deliver to Flinders most if not all of its restart budget requirements,” said Martin McFarlane, Flinders president and CEO in a prepared statement.

The graphite deposits, Flinders has said, are enough to keep it going for over 30 years. The mine went out of production because of lacklustre graphite prices in the early 2000s.

Since then it has been on pause with infrastructure including tailings and milling facilities still in place.

One area the company looks keen to capitalize on is the battery market that requires high purity graphite – with 99.5 percent or more carbon. This high purity graphite fetches a premium price.

Flinders has said that it will conduct feasibility tests in a pilot plant to see if its worth upgrading its graphite products to near full carbon purity. Historically past operators produced graphite that was 85 to 94 percent carbon at the Kringel mine, Flinders said.


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