Great Lakes Graphite (GLK.V) Generates $193K in Graphite Sales in 4Q of FY 2016 Zacks Small Cap Research
March 2, 2017
Headquartered in Toronto, Great Lakes Graphite Inc. (GLK.V) (GLKIF) is an industrial minerals company that is focused on marketing and supplying value-added graphite products to customers in North America. In the company’s fiscal year ending October 31, 2016, the company joined the graphite supply chain generating $226,522 in revenue. Currently, synthetic graphite is being sourced domestically and sold at a negative margin while the company is establishing and developing a client base. Management anticipates a positive margin when the company ultimately will offer micronized and purified natural flake graphite products sourced from its Lochaber Graphite Project located in the Province of Québec and which will be processed at its industrial facility located in Matheson, Ontario. However, management’s immediate focus remains the sale of third-party graphite material as the company develops a customer base in the marketplace.
Management understands the unique procurement processes for graphite products and is in the process of attempting to build and solidify strong relationships with customers. This direct marketing effort is a key core competency of the company. Great Lakes Graphite’s marketing approach is to create strong customer relationships with end-users of graphite by thoroughly understanding of each prospective customer’s specific graphite requirements and by providing samples for qualification testing.
In the meantime, the costs of developing management’s initiatives (including management, consulting and professional fees, along with exploration activities and the refurbishment of the Matheson milling facility) resulted in a net loss of $2.62 million ($0.03 per diluted share) for fiscal 2016. The company’s operations were funded by $1.3 million in net proceeds from the issuance of common shares through private placements and $288,652 from a loan facility from the Northern Ontario Heritage Fund Corporation.
Additional Orders Received
In February, Great Lakes Graphite received additional purchase orders. The Texas-based industrial customer placed another two purchase orders for a combined 40 tons of synthetic graphite products. The company’s customer in Texas ordered 400 tons of micronized synthetic graphite during calendar 2016 and has indicated that at least twice that amount is expected to be required during 2017. Through February, this customer alone has placed five purchase orders for a combined 100 tons.
In addition, a large corporation headquartered in Western Europe with production facilities in North America and the Middle East has placed an order for 400 kilograms (0.44 ton) of micronized natural flake graphite in order to conduct production-scale qualification tests; that corporation had received an initial two-kilogram sample for pre-qualification testing in December. The company continually provides samples of graphite products for qualification to potential customers across a range of targeted industries.
Lochaber Graphite Project
In mid-February, Great Lakes Graphite provided an update concerning the bulk sample material delivered to PRO (Process Research ORTECH) in Mississauga, Ontario for metallurgical and purification work. Management expects to receive results from further purity testing in the third quarter.
