Ottawa-based Grafoid Inc., a developer of graphene-focused applications and producer of high-quality graphene which it has patented under the trade name Mesograf™, has finalized two offtake agreements for obtaining graphite concentrate from a mining project at Lac Knife in Quebec for the next 10 years.
The agreement was managed through Grafoid’s parent company Focus Graphite Inc. (TSX VENTURE:FMS) (OTCQX:FCSMF) (FRANKFURT:FKC), which holds 7.8 million common shares in privately held Grafoid worth approximately $39 million US.
“These agreements are the culmination of Focus Graphite’s long-held strategic business vision that looked towards selling Lac Knife’s high grade, high purity graphite into future high value technology markets,” said Focus Graphite CEO Gary Economo. “And the future is represented by a small but significant flake graphite mining deposit on the road to development in the Northern Quebec community of Fermont.”
The Lac Knife Project, as a producer of graphite, is a priority of the Quebec government’s Plan Nord initiative, which supports development in Quebec’s northern regions.
An Environmental and Social Impact Assessment process was filed with the Quebec government last December and is currently underway.
The terms of the agreement will see Grafoid paying the Lac Knife project $1 million over a 12-month period beginning in September.
Pricing for the 10-year agreement will be set at market prices minus 10%.
The second offtake agreement relates to graphene-based polymers to supply the automotive and aerospace industries, areas which Grafoid believes hold considerable promise as manufacturers look to replace currently existing expensive carbon fibre technologies, also reducing transportation companies’ fuel costs and extending material lifespans.
“The various graphene materials produced from Lac Knife’s graphite are destined for lightweight, stronger automotive components – including high energy power supplies – for next generation electric vehicles,” said Mr. Economo. “The benefits of business innovation far outweigh today’s risks of maintaining the status quo during this transitional period of global technological change. In this regard, our strategy leads the way into diverse technology markets on a universal scale.”
Focus Graphite, being Grafoid’s parent company and 18% owner, is Grafoid’s most significant stakeholder.
This past June, Focus Graphite ended its relationship with ex-President and CEO Donald Baxter, provoked by “a strong difference of vision” between the Focus Graphite Board of Directors and Grafoid CEO Gary Economo, which resulted in Economo taking over as Focus Graphite’s interim President while remaining CEO.
In February, Grafoid, which has a research centre in Kingston, was awarded an $8.1 million federal grant to design and test an automation system to produce its Mesograf product.
Focus Graphite recently revealed that Grafoid recorded sales of $1.9 million for the fiscal year ending in March, resulting in a net loss of $8.9 million.
That was a year, however, that saw Grafoid acquire several companies, including Kingston-based advanced materials technology developer ALCERECO for $1.3 million US, which Grafoid turned into its research centre.
Grafoid also took a 75% stake in lithium ion battery developer Braille Battery Inc. in September 2014. Financial details of that transaction were not disclosed.
In April 2015, Grafoid announced plans to acquire Hamburg, Germany-based Ames Rubber Corporation.
In May 2015, Grafoid acquired Ottawa-based analytical services provider MuAnalysis, which specializes in the electronics, photonics, life sciences and manufacturing industries.
With all of these acquisitions in place, and the Lac Knife Project bringing in a steady supply of graphite, and the drama between the departed president and Focus Graphite Board of Directors apparently resolved, Grafoid looks well positioned to capitalize on developing a future for graphene development in Canada.