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Accelerating Demand for Electric Vehicles is Fueling the Need for More Graphite

With electric vehicle demand showing no signs of slowing, it’s increasing the need for high-quality metals, like graphite. After all, graphite is an essential material used for producing the anode of lithium-ion batteries using in electric vehicles and energy storage.

At the moment, it’s in big demand. That’s because, by 2030, the world could see 125 million EVs on the road, which could be beneficial for companies, such as Tesla Inc. (NASDAQ:TSLA), and General Motors Company (NYSE:GM). In California, for example, Gov. Newsom signed an executive order that will ban the sale of gas-powered passenger cars in the state starting in 2035. That means only EVs will be available for purchase in the next 15 years.

However, for that to happen, the world will need substantial supply of graphite.

Unfortunately, there’s a supply problem. One so severe, the USGS includes graphite on its list of 35 minerals and metals considered critical to the United States. “USGS also sees a major spike in U.S. demand for graphite when Tesla Motor's Gigafactory, an enormous lithium-ion battery facility being constructed in Nevada, is fully operational.”

That’s where a company like Ceylon Graphite (TSXV:CYL)(OTC:CYLYF) comes into play.

Ceylon Graphite is involved in the exploration and production of graphite in historic resource jurisdictions in Sri Lanka. It holds a land package constituting 121 km² grids containing historic vein graphite deposits. These unique and comparatively higher purity vein (lump) deposits currently make up less than 1% of the world graphite production.

In addition, the company just announced that it has designed and launched an expanded drill program at one of its properties in Sri Lanka, with drilling commencing on its H1 site.  H1 is one of 121 grids held by Ceylon Graphite’s subsidiary Sarcon Development (Pvt) Ltd under EL 222. The initial phase of the drill program will include 6 new 220 to 250 meters bore holes and has been designed to develop the parameters of the H1 mine. The Company has also retained the Geological Survey and Mines Bureau Technical Services drilling team to provide an additional drill rig and operators to complement its own drill rig and drilling team. 

Drilling at the H1 grid commenced in 2019, four bore holes were drilled and adit clearing started prior to the cessation of operations due to COVID-19 related delays these bore holes resulted in graphite veins of varying thickness being intercepted at various depths between 67 to 142 meters. Please see the Company’s press release of 28th June 2019 for more information.

“We are pleased to begin drilling at scale again and look forward to completing the drill program in the next few months,” said Ceylon Graphite, Chairman and Chief Executive Officer Bharat Parashar. “Previous drilling at H1 has produced good results and we anticipate even better results in this program due to the close proximity to the recently discovered large high grade surface vein. In addition to the drilling, we have restarted work on an adit which will follow the vein in the overburden up to the rock and then will be converted into a shaft to access the mine.”

The company controls 121 grids with each grid being one square kilometre areas well-known for its historical graphite production. Commercial production began at Ceylon’s K1 site in 2020 and the Company has initiated the application process for an Industrial Mining License Category A for its M1 site, on which it expects to begin commercial production in Q3 2021. Ceylon is currently one of very few public companies that is in commercial production and unique due to the high-grade nature of its vein graphite.

The updated 2021 drilling program has been designed to:

- Follow up the successful 2019 drill campaign at the H1 site

- Assess VLF data (conductivity) to understand vein direction

- Develop additional drill targets along known veins to help identify quantity and depth as well as identify offshoot veins, vein intersections and caverns.

- Confirmation and formalization of resource estimate for H1 over the following 6 months

- Start geological work and drilling in the rest of the 10 prioritized grids with the second Sarcon drill.

- Provide sufficient date to file 43-101 compliant resource reports for each site.

- Oversight of the drilling program by Senior Consultant Geologist Dr. Ranjith Premasiri. Dr. Premasiri has a PhD In Geophysics from the United Kingdom and is a Chartered Geologist. He is a Professor in the Department of Earth Resources at Moratuwa University in Sri Lanka (Department Head 2016-2019). He has also worked at the Geological Society and Mines Bureau of Sri Lanka. He is currently the President of the Geological Society of Sri Lanka and was General Secretary of the Institute of Geology, Sri Lanka 2009 – 2016.

With the EV Boom Accelerating, Lithium is Also Under Heavy Demand

The world may soon run into another severe lithium supply crunch. By 2024, demand for lithium is expected to more than double, as the production of electric vehicle batteries gears up for big growth, as reported by Creamer Media’s Mining Weekly. 

In addition, “A global push for EV adoption, helped by government subsidies and incentives, means that demand for lithium is not going away. Companies like Volkswagen, Ford, Mercedes and Amazon having started shifting their focus to electric vehicles,” reports Bloomberg.

That’s beneficial for lithium companies, such as Albemarle Corp. (NYSE:ALB), and Lithium Americas Corp. (NYSE:LAC).

Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for Ceylon Graphite by a third party. We own ZERO shares of Ceylon Graphite. Please click here for full disclaimer.

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