Simon Moores article of 2 Aug 2013 presents a rather simplistic picture of the conversion process from ore to spherical graphite. The pyramid was used to illustrate the concept of loss due to conversion which is true for any graphite flakes or not (remember that vein type such as that from Albany deposit consist of flake as well as indicated by Lakehead U commissioned by Zen...see the NR). But the loss must be quantified in terms of number, e.g. in terms of the percentage (%). This percentage loss up to a certain stage has been discussed in the graphite circle: 70% loss for small flakes compared to 30% for large/jumbo flakes.

The pyramid picture in this article, in a sense, represents an unfair illustration for flake graphite. Most of us are visual hence a picture is a very powerful tool. So if the process (just before coating) is "eye-balled", the impression would be totally wrong (unfair) since what left at the top triangle would be a tiny tiny portion of the original amount.

A better discussion on losses should perhaps be started from the conversion of the concentrates (from the mill) to spherical, since the mining and milling cost up to the concentrate stage (can be estimated from the company BFS) and will be known from the company operational cost to produce the concentrate which the company can sell to the market (they will know the proceeds from the sale as well). There must be some profit, or else!

The value added stuff, e.g. from concentrate to spherical will result in loss as well, but the final product would fetch better price. Again, there must be some profit from the value-added operation. Some company many want to have a dual stream, depending on market demand, to produce both the run-of-the-mill concentrate (which could be sold at some profitable price) and the value-added products such as spherical stuff that they could sell for better price (but it has to be profitable). It should be remember that this is industrial minenerals (i.e. unlike gold) and the products must be tailored to customers needs.

The base of the pyramid was labelled "flake graphite mining", but it could be replaced by "vein typed" or "anything else". Unless, the head grade is 100%, there will be a huge change in volume to get from 5% grade to say 98% Cg.

The point here is that we need to look at a particular company and its products. Numbers (costs, etc) must be presented to show potential profits from the production and conversion operations rather than just a simple equilateral triangle for flake graphite to illustrate the loss concept that we all know.

The same equilateral triangle can be used for any mining/conversion operation and for any material. Conversion is like translation, there will be losses along the way. The question is what is the amount of loss and can the company make some profit.

goldhunter