From mine to market: creating a vertically integrated supply chain for high-specification graphite products

McIntosh Graphite Project

A low-risk, fully funded graphite project with quality downstream products

Upstream

Our flagship McIntosh Project is a large-scale, high quality flake graphite deposit located in the Kimberley region of Western Australia.

Resources for the project currently sit at 21.3 million tonnes grading 4.5 per cent total graphite carbon (TGC) for 964,000 contained tonnes (25 April, 2017). There is a significant Exploration Target comprising 110 to 220 million tonnes grading between 2.5 and 5.0% TGC which the Company will drill test to build up the project life. Hexagon has deliberately focused its technical resources on verifying the technical attributes of the McIntosh graphite flake as a genuine driver of value rather than build up the “mining metrics”. Graphite is an industrial mineral where the focus needs to be on product specifications and marketing.

Partnered with ASX-listed Mineral Resources Limited (MRL), MRL will fund all Feasibility Study work, capital development and ramp-up costs to earn a 51 per cent interest in the project (subject to a positive feasibility study).

A Definitive Feasibility Study kicked off in mid-2018 and seeks to increase the Mineral Resource and to further optimise the process flowsheet to produce several flake graphite concentrate products defined by flake size.

Commercial production is planned to commence in 2021.

Downstream

Metallurgical studies show McIntosh graphite is high purity, high value with low purification costs. The concentrate material can be purified to levels between 99.99(4N) and 99.999(5N) per cent (five nines graphite the “nuclear purity world”). As Hexagon sought to diversify its end use applications it found that the Mineral Resource is dominated by graphite flakes classed as Large, Jumbo and Super Jumbo size.

McIntosh graphite meets many premium end use requirements and has a range of technical attributes. Its rare and highly ordered crystalline structures make it suitable to displace synthetic graphite and it is easy and low cost to produce purify and micronise with excellent electrochemical properties.

Graphite Business Strategy; building a vertically integrated business

Hexagon is developing a vertically integrated graphite business; the upstream or Stage 1 development is focussed on its McIntosh Project as a primary source of flake concentrates. The downstream or Stage 2 is based on early purification of the graphite concentrates followed by additional processing, specific to the end-user requirements.

Stage 1

The McIntosh Project

The joint venture with MRL is a major de-risking event for HXG which is fully funded to commercial production

Strategy includes multi open pit mining and simple flotation to produce around 100,000tpa of high-grade (96-98% TGC) graphite concentrate, likely across 3 flake sizes. Mineral Resources (via the JV) is contributing technical expertise from “the pit to the wharf” with a strong Western Australian operational presence.

Stage 2

Refining, Product Development and Marketing

The JV has allowed us to shift our focus on the downstream development of Stage 2 test work:

  • Piloting of thermal purification & associated downstream production streams
  • Commercialisation of a thermal purification circuit & downstream BAM/CEM & high purity ultrafine production lines.
  • Target Product development comprises
    • Product 1 – “Expanded Line”
      • destined for foils and shielding (nuclear grade) and Conductivity Enhancement Materials (CEM)
    • Product 2 – “Electrode Line”
      • suitable for a wide range of customers but HXG’s focus is on electrodes in Electric Arc Furnaces (EAF) substituting for synthetic graphite on the basis of enhanced technical properties.
      • (Wide size range – could be split into 2 around the 80 mesh sizing)
    • Product 3 – “Battery Line”
      • destined for lithium ion Battery Anode Material (BAM) and CEM. Also suitable for a range of high-end industrial applications e.g. refractory (in furnace ladles and crucibles), mould release as well as emerging applications such as synthetic diamonds (for semi-conductors) and Obscuration (EM attenuation) technology.

We aim to verify through an industry recognised “5M” qualification procedure that our graphite can meet the exacting specifications for high value applications through refining and secondary processing.

 

Customers require “5-M’s” Qualification

  1. Material Source – consistent
  2. Method – production process
  3. Machines – utilisation the same process technology
  4. Manufacturing Standards – QA/QC & ISO
  5. Management & Ownership – consistent

HXG is working to meet these qualification requirements in its Product Development program

Continued major improvements have been made to our conventional flow sheet for downstream processing. Our established downstream flow sheet starts with the purification of graphite concentrate to at least 99.95 wt.% total graphitic carbon (TGC).

Working with our US technical partner and other internationally reputable equipment manufacturers, we identified a spheroidisation milling/classification technology which offers major cost savings and improved productivity and yield that cannot be delivered by traditional cascade impact milling circuits Spheroidisation and classification test work on purified concentrate samples which assessed the suitability of Hexagon’s graphite for the battery materials market highlighted that:

  • Up to 69.17% converts to spherical graphite suitable for anodes in a range of lithium ion battery types (Battery Anode Material (BAM)); and
  • Approximately 31% converts to material suitable for carbon Conductivity Enhancement Materials (CEM), which is potentially a higher priced product and larger volume than BAM as it is utilised in alkaline batteries and other battery chemistries as well as rechargeable and primary lithium ion batteries.

Using this as a basis will allow us to “leap-frog” competitors and reap major competitive benefits through:

  • Lower purification costs
  • Increased revenue per tonne of graphite concentrate feedstock
  • Lower spheroidisation and ultrafine treatment costs
  • Potential overall yield of nearly 100% graphite concentrate to high value products