Investition in eine außergewöhnlich profitable Graphitmine in Sri Lanka

 

PROJECT PROPOSAL FOR GRAPHITE

 

 

[GRAPHITE MINING, PROCESSING AND EXPORT COMPANY

AT RAGEDARA, MELSIRIPURA]

SRI LANKA

 

 

 

 

May 2016.

1. EXCECUTIVE SUMMARY

 

 

1.1 WHY GRAPHITE?

a) The Scanning of history shows that there were “Stone Era”, “Metal Era” followed by the “Plastic Era” and undoubtedly it is going to be the “Graphite Era” in the near future and at its peak it will be “Graphene”.

b) All the industrial nations have categorized graphite as one of the 10 most important industrial minerals in the world whereas Germany has categorized it as one of the two most valuable substances of the future.

c) The EU have allocated and invested 1.7 billion Euros (2.3 billion US$) for the development of Graphite/Graphene and this is the ever biggest allocation for any kind of Industrial material development in the world.

d) All the German Technical Universities and big institutions such as Frauen-hofer Institute, Max-planker Institute, and Industrial Giants like BASF, BAYEAR, SIEMANS, BMW, BOSH and many others are experimenting and fighting for their patent rights for different kind of graphite/graphene developments and applications. This is not much different in USA as well.

e) The unique qualities like very high heat resistance, very high chemical inertness, very high energy storing capacity, very high hardness, very high data transfer speed [few hundred times higher than any other known substance(Si)], very high electric conductivity etc.; the graphene will conquer all segments of industrial sectors and any other applications of the human beings.

 

 

1.2 WHY SRI LANKAN GRAPHITE?

 

a) Until the end of the Second World War Sri Lanka was the World number 1 graphite producer and the exporter.

(Source - Graphite in Sri Lanka, M.M.J.W. Herath, 2008)

b) It occurs in the most pure form compared with any other graphite producing country in the world.

(Source - USBM Mineral Industry Survey, Herath 2008)

c) This is crystalline vein graphite.

d) Vein graphite mining is much more environmental friendly compared to the disseminated and flake graphite mining in any part of the world.

e) Sri Lankan vein graphite doesn’t need very costly chemical processes to upgrade it to high-tech industries.

f) 10 Things You Probably Didn't Know About Sri Lankan Graphite

https://www.youtube.com/watch?v=VgE1um2HDAA

1.3 WHY RAGEDARA GRAPHITE MINE?

Graphite Mining Process & Ragedara Mine Tour, Sri Lanka
https://www.youtube.com/watch?v=xC8fIM1FNMs&width=640&height=480

 

a) Ragedara Graphite mine was the number 1 mine for producing graphite until end of the Second World War. It had produced the bulk of the production of the country. (Ragedara Mine Stands in the No.1 position in the British Mine Registry of Sri Lanka due to its production capacity at that time)

b) The Graphite from Ragedara was tested as the most pure vein graphite in the world. (Analytical Reports of Superior Graphite and SGS)

c) The Ragedara mine has the most concentrated number of veins and it had more than 30 graphite out crops in its own land whereas the other major mines have only couple of vein out crops.

d) Compared to other operating mines in Sri Lanka, the Ragedara mine is very shallow. The Ragedara Mine is around 200 ft. whereas the other two major mines lie between 2000-3000 ft. depths.

e) The mine has the least mining cost compared with any other mine in the country and most stable mining conditions.

f) The tests done in Canada and Switzerland have shown that, to make synthetic quality graphite from lump grade graphite from Ragedara mine was much cheaper than from any other known graphite source.

g) The most unique and valuable property of Ragedara lump graphite is that, it can produce Graphene physically and this is the only graphite mine which has this ability.

h) All the other operational mines in Sri Lanka are either partly owned by the government with many other local and foreign collaborations or totally owned by the government whereas the Ragedara graphite mine has no such encumbrances for any investor.

i) Any investor can join the operating Ragedara mine, whereas for any other new graphite project it will take 2-3 years’ time to get an A-Grade Mining License for mining graphite.

 

 

 

CHAPTER 2 – POTENTIALS

 

 

2.1 GRAPHITE MINE

 

Ragedara Graphite Mine is situated approximately 30 km north east of the Kurunegala town in the central part of Sri Lanka. The land is well serviced by a road network which connects to Kurunegala-Dambulla main road. The property is approximately three hour drive from capital Colombo and half an hour drive from Kurunegala city.

 

Neues Textfeld >>

Ragedara Graphite Mine

Old Graphite Mining Pits concentrated adjacent to the main operating pit

Old Graphite Mining Pits marked in black dots.

Operating Main Pit marked in red dot.

Developing a mining industry in Sri Lanka is a challenging task and it needs more time, effort and money. Sakura Graphite (Pvt.) Ltd. holds all necessary approvals for mining graphite under the highest category of mining, Industrial Mining License- A (IML-A).

 

About 20 approvals should be acquired from different entities such as,

a) Grama Niladhari Approval (Village Representative)

b) Assistant Government Agent Approval (AGA)

c) Local Governmental Authority Approval (Pradesheeya Sabha)

d) Urban Development Authority Approval (UDA)

e) National Building Research Organization Approval (NBRO)

f) Natural Resource Management Center Approval (NRMC)

g) Central Environmental Authority Approval (CEA)

h) PHI Approval

i) Geological Survey and Mines Bureau Approval (GSMB)

j) Land Lord’s Approval (as a Government Land)

k) District Secretariat Office Approval

l) Ministry Of Defense Approval

m) Sri Lanka Police Service Approval

n) Department Inland Revenue Approval

o) Sri Lanka Customs Approval etc.

 

Getting an IML-A for mining graphite requires a detailed exploration activity. In the end of about 1-2 years of exploration program and after presenting the findings to Geological Survey and Mines Bureau (GSMB) they grant us to mine the deposits after receiving the Environmental Protection License (EPL) from the Ministry of Environment.

 

Resistivity image along one investigated profile during the detailed Exploration Activities

Parallel to all these approvals, we still need to process approvals to obtain explosives, trading facilities and exports etc. from different governmental entities of Sri Lanka.

So it’s a series of approvals and we are happy to mention that our company has all these approvals for mining of the Ragedara graphite mine.

 

2.2 EXPORTS

We have done some Shipments to Germany, Switzerland and United Kingdom and we sell some quantities to local companies who are having foreign buyers.

We have signed two Marketing Agreement in 2016 February with
ThyssenKrupp Metallurgical Products USA and
ThyssenKrupp Metallurgical Products Germany

as Distributer to purchase the Product exclusively for the Territory EU 28, Russia, Turkey, USA/Canada starting the delivery till end of 2016. Full production of the mine of 18.000 mt shall be reached in 5 years.

 

 

2.3 EXISTING RAW MATERIAL STOCKS

 

Currently we have a stock of about 700 tons of graphite at stores and producing about 30 – 40 tons of graphite per month. The average market price stands for our quality graphite as follows.

Lumps (97-99% C) - 2200-2500 US$/ton

Bora (92-97% C) - 1500 - 1800 US$/ton

Chips (85-90% C) - 1100 - 1300 US$/ton

Dust (80-90% C) - 800 - 1000 US$/ton.

Old mining waste storage 10.000 to 15.000 t (80-90% C) – (10.0 -15.0 Mn US$)

 

2.4 NATURE OF ON GOING BUSINESS

 

Currently the Ragedara Graphite Mine is operated with the support of about 40-50 laborers. The mine is connected to the National Grid and equipped with latest machinery and tools such as 400 KVA Transformer, 750 cfm Air Compressor, 400 KVA Generator, Atlas Copco Jack Hammers, 200 m Core drilling machine, VOLVO 200 Excavator / Barker, Lorries etc. All mechanical, electrical, welding and black smith works were done at the site itself and the mining crew is equipped with proper machinery.

Ventilation systems, High pressure Water supply, Rail tracks for Material transports, Alarm systems, CCT Camera systems

All safety regulations are followed to ensure the worker safety at the mine.

 

 

 

 

 

CHAPTER 3 - OFFERING ON INVESTMENT

 

3.1 PAY OFF OF RETIRING SHAREHOLDERS

 

According to the JV-Agreement the foreign Investor must invest 12 million US$ on the project till 30th April 2016. They have invested up to date less than 10% of the agreed amount. According to the JV-Agreement they will be paid off.

 

3.2 INVESTMENT SCHEDULE        

 

The investment expected is 15 Million US$. This is equal to 30% of the shares of the Joint Venture. This amount can bring in to the joint venture either at once or in stages after negotiations. The shares will be issued proportionate to the amount of investment.   

Sale of additional 10% of shares will be offered for 10 Million US$. The Total investment for Ragedara mine will be 25 Million US$ for 40% of the company shares.

 

 

 

 

SUMMARY OF THE

 

INVESTMENT

 

PROPOSAL FOR THE GRAPHITE

 

 

 

The Valuation in 2012

The world biggest mineral mining related stock exchange is Toronto Stock Exchange (TSX). Any PLC company registered in the TSX before investing on any mine must be evaluated through a TSX registered accredited company such as Industrial Alliance Securities Inc. (“IAS”). Before the JV-Partner invested on our Mine IAS did evaluation. They have valued 1/4th area of our Land for a sum of 37.29 million US$ in 2012 before startup mining operations.)

 

1. Investment on increase the Production

 

30 % of shares of the company for total Investment of 15 Mn US$

The volume of investment for machinery and working capital will be 15 Mn US$.

Currently we are operating the main Pitt in 1 Shift with a production of 30-40 t/month.

Current stock is about 700t (90-99) %C (minimum 1.5 Mn US$)

Old storage 10.000 to 15.000 t mine waste (80-90% C) – (10.0 -15.0 Mn US$)

Phase 1: Investment 10Mn US$

  1. The first expansion (Purchase Exploration Equipments, Approvals etc. for the Ragedara mine) will be to mine out more graphite by developing the facilities of the currently operating main Pitt and
  2. Secondly to re-start another 4-6 abandoned mining pits located on the same land to increase the production to a globally considerable production level of 600 to 1000 tons per month within 1-2 years’ time.
  3. Mining expansion and Chipping off of mine waste to stabilize the produce graphite up to 1000 tons per month.

We have to increase the production up to 1200 t/month to full fill the marketing agreement with ThyssenKrup within 5 years. (Since all the world’s biggest graphite players such as Asbury, Traxis, Technographite, SGL Carbon, Imerys, Masson Graphite etc., were demanding for a minimum quantity of few hundred tons per month from our high end materials at least to offer on their catalogues)

 

 

Investment for new Shafts total 10 Mn US$ according to the Investment Plan as follows:

Shaft/Pitt

Shift

Production t/month

1

1

30-40

 

2

30-40

Sub Total

2

60-80

Investment 2.0 Mn US$

 

 

2

1

30-40

 

2

30-40

Sub Total

 

120-160

Investment 2.0 Mn US$

 

 

3

1

30-40

 

2

30-40

Sub Total

 

180-240

Investment 2.0 Mn US$

 

 

4

1

30-40

 

2

30-40

Sub Total

 

240-320

Investment 2.0 Mn US$

 

 

5

1

30-40

 

2

30-40

Sub Total

 

300-400

Investment 2.0 Mn US$

 

 

6

1

30-40

 

2

30-40

Total production 6 shafts and 2 shifts

360 – 480 t

Total production 6 shafts and 3 shifts

540 – 720 t

 

Phase 2: value-addition total investment 5 Mn US$

Value-addition to the product up to 99.99% Carbon to match the synthetic graphite quality for high tech battery and other applications. (USD 3Mn)

New Land acquisition to minimize the mining cost. (USD 1Mn)

Introducing our high quality material to Graphene producers. (USD 1.0 Mn)

Phase 3: Development of methodologies to produce graphene physically from our own Graphite.

 

 

2. The Shares Offer to the Investor

 

10 % of shares of the new joint venture will be offered for the purchase price of 10 Mn US$.

This is for pay off the retiring shareholder and his equipment etc.

 

According to the JV in 2012
Shareholding
offered

Current Shareholding according to the Investment

LOCAL

60%

>90%

FOREIGN

40%

<10%

 

3. Investment & Time Frame

 

The investment expected is 15 Million US$ which can brought in to the joint venture either at once or in stages after negotiations. In the event of staged disbursements of investment the shares will be offered according to the proportion of the investment.

 

4. Audited accounts of the business.

 

Accounts will be submitted later if needed.

 

5. Proposed expansion and diversification proposal

 

5.1    MICRONIZING AND FLOATATION PLANT TO UPGRADE THE TOTAL PRODUCTION TO 99+C QUALITY

 

By putting up the micronizing plant we can not only upgrade our total production up to 99+ Carbon percentages (100 % production will be 99+ C) but also we can increase our production up to few hundred tons per month by using materials from old mining waste. We have approximately 10,000 to 15,000 tons of good quality graphite as waste of old mining. (Tailings of the old pits.)

The present price for 99+C % micronized Sri Lankan graphite stands from 2,500 to 4,000 US$ per ton whereas the cost of production including the mining, micronizing and floating will be around 500-700 US$ per ton.

Our graphite powder was tested (Superior Graphite Analytical Report) and it was very positive as an additive for any kind of lubricant specially for high temperature applications and in that matter the price will be about 20,000 US$ per ton.

 

5.2    FURTHER VALUE ADDITION OF THE PRODUCT TO SYNTHETIC QUALITY GRAPHITE GRADE OF 99.99% C

Putting up a value addition plant to convert our graphite to synthetic quality graphite equalnt grade is our next step which will cost around 3-5 million US$ for the plant and for the patent rights.

One Canadian company and Imerys Graphite & Carbon of Switzerland have tested our material for suitability of producing synthetic quality graphite very positively which is used for different kinds of batteries.  

The price for the processed materials will range from 8,000 - 25,000 US$ per ton at present.

There is a shortage of 30% production compared to the world’s requirement for synthetic grade graphite in the next 2-3 years, which is about 300,000 tons of synthetic graphite. (Publication on Industrial Minerals)

 

5.3    Graphene Business

Graphene out our products Ranks Number One in Test Results Completed by NUS Centre for Advanced 2D Materials (previously known as Graphene Research Centre) at the National University of Singapore (NUS). More than 20 well-known commercial graphene producers from North America and Europe were tested, as well as many less known Asian suppliers. The test results indicate that our graphene is the top quality tested not only based on the overall evaluation but also all of the individual criteria: Our sample has the highest content of graphene flakes with the best structural quality as measured by stringent scientific criteria.

Our graphite Samples were tested by the Nano Technology Institute of Sri Lanka, an American Graphene producer and a European University and all of them were able to produce graphene out of our lump graphite physically. This was conducted under lab scale and they are very confident that they can develop it to a normal industrial scale production at a very moderate cost because there is no expensive chemical treatment/purification processes etc. (About 50,000 US$/ton processing cost)

Outstanding properties of graphene such as hardness higher than diamond, high thermal resistance, Strong chemical resistance, high electric conductivity, few hundred times faster data transmission capacity compared with presents data processors etc., will make the future a graphene revolution.

Since our mine is the only known graphite mine which has the materials to produce graphene physically it will have a special place and there will be a huge demand on graphene in all kinds of industries in the future.

The selling price for a Gram of graphene is 50-300 US$ at the moment. (1 ton of graphene equals to 50-300 million US$) and a gram of graphite Nano tube is about 1000 US$ per Gram.

7. Projected cash flows and profitability forecast for the next 10 years.

 

Total net profit at the end of the year 2016

No Processing

504.000 USD

 

with Processing

840.000 USD

Total net profit at the end of the year 2017

with Processing

2.880.000 USD

     

The monthly total production with mining waste

with Processing

1000 t

Pice per Tone

 

2.500 USD

cost Mining, Micronizing and floatation per ton

 

700 USD

Net Profit after Produktion

 

1.800 USD

Other costs such as transport, Tax etc

20%

500 USD

net Profit per ton

 

1.300 USD

Tageting Profit in the third Year

 

15.600.000 USD

8. The borrowings and other debt obligations of the Company.

There are no any borrowings as such other than the above mentioned investment which is to be set off by this transaction.