posted on SH, post here for info.

goldhunter

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Neil, agreed with your assessment that Fulp shows that he's no authority by being overly simplistic in picking his screening criteria, particularly the minimum 5% grade.

High grade is good. But, grade alone is not king, since there are other factors that would make or break a project, including the following.

- flake size

- flake size distribution (see Chris Berry article for a recommended "balanced flake size distribution foot print". notiing that NGC has more than half in the jumbo and super jumbo category)

- purity, NGC has 52% in the range 97-98% with some up to 99% purity (fetching top dollars, a lot more than the conservative price of $1700/tonne assumed in the PEA)

- cost to upgrade low purity to high purity. Less expensive and environmental-friendly would be more favourable.

- amenable for conversion to spherical graphite (for high end batteries), and this must be proven by testing by an independent professional organization, not just by somebody saying so.

- metallurgy

- ore chemical composition, ore with high sulphur contents would be subject to more stringent environmental requirements for the mining operation, especially disposal of the tailings (large space for this is required along with the mine closure plan)

- transporation from pit to milling and processing facilities (for NGC it's 0.5km to the crusher, and a small fleet of 30+tonne would be required for this short haul)

- transportation for the products to the market (NGC would truck the stuff to the port of Montreal, a 4-hr drive away on the Trans Canada highways...just a few truck-loads a day.

- etc...

In summary, picking the grade alone, as suggested by Fulp, may send investors to the wrong track. A complete set of parameters will have to be considered before a verdict can be given, as done in the PEA and the bankable EA. At a minimum, a PEA will have to be carried out to give potential investors an appreciation if the project is economicallay viable (i.e. can it make some money?)

NGC PEA is a good document to go through, in detail. All the above has been addressed by the PEA, noting that they show a profit of $700/tonne using a conservative price of $1700/tonne and at a total production cost of approximately $1000/tonne. According to the PEA the annual profit for 30 years or so is approximately $14M/yr with quite a bit more during the first few years because of the high grades (2.71%Cg for pit #1). The minimum grade would be 2.20% Cg. So assuming 2% Cg grade, as did by some previous poster, would short change NGC graphite production by at least 10% (for 2.20%) and by 23% (for 2.71%) which is quite significant during the initial period when they mine the high grade ore. It's convenient to simplify things. But it has to be fair. It would not be fair to round down the grade for one company and up for another (if it's 15.6% don't make it 16% and bring 2.20 and 2.71% to 2.0%), especially rounding down the number in the lower range...percentage change is large. In addition, a spreadsheet would be convenient, but it's important to know which numbers to plug in, since garbage-in garbage out. Actually, there is no need a speadsheet or a computer for these simple calculations. A cheap calculator with the back of an envelope, or a napkin, would do just fine.

Let's compare apple to apple in a comprehensive manner (i.e. PEA to PEA) rather than pick and choose a favourite parameter and ignore the rest to justify the argument of the day.

goldhunter