When Pat Volpe accepted the position of chairman of Bisan earlier this year the company had few assets and little direction.
But since his appointment Volpe has driven a new verve into Bisan that has seen the company actively seek investments and opportunities, including the exciting graphite prospect at Pencil Hill in Botswana.
Discovered by Volpe’s exploration company QPENE, Pencil Hill is located in Botswana’s east and close to the Zimbabwe border. It’s the first graphite play in a country that has traditionally mined diamonds, precious and base metals.
Bisan can acquire a 30% interest in Pencil Hill with an investment of $2 million, equivalent to a market capitalisation for Pencil Hill of $6.6 million. The company also has first right of refusal to acquire up to 51% pre-IPO, subject to due diligence.
Initial exploration at Pencil Hill has confirmed a large 25km at surface VTEM anomaly, with trenches 1km apart confirming graphite hits. Two drill holes encountered graphite with lab results showing some 70m of graphite.
So why graphite?
“Graphite is the major global growth commodity of the 21st century,” Volpe told RESOURCESTOCKS.
“Long term global demand is expected to double in the next eight years due to a growing number of applications in technology, industrial and new energy markets.
“Graphite is an essential component of lithium ion batteries (used in smart phones, tablets and electric cars), fuel cells, vanadium redox batteries and even nuclear energy.”
In addition, graphite has applications with graphene, the “worlds next super-material”: pure carbon in the form of a very thin, nearly transparent sheet, just one atom thick and remarkably strong.
“The USA, Europe and Japan are almost entirely dependent on imported graphite,” Volpe explained.
“China produces 75% of the world’s supply, but most of its resources are low grade, so China is now the world’s biggest importer of graphite.”
Eco-car manufacturer Tesla’s US$5 billion battery “gigafactory” alone will require up to six new graphite mines, increasing demand by up to 152%.
“This means there are opportunities for commercial-scale graphite miners other than China to service the significant global demand,” Volpe said.
The British Geological Survey listed graphite, along with antimony and rare earth elements, as the minerals most at risk of global supply disruption.
Graphite had a relative supply risk index of 8.1, compared with 9.5 for REEs, the highest value on the index.
Annual graphite demand is expected to increase by 50% from 1.1 million tonnes to 1.5Mt by 2020 based on the steel market alone, according to Volpe.
“Demand from batteries and high-tech applications are projected to be dramatic,” he said.
“Lithium-ion batteries are projected to more than double the demand for graphite to about 2.6Mt by 2020.”
Bisan is the first exploration company focused on unlocking the graphite potential of Botswana through a holding of 830 sq.km.
Initial work has confirmed a potential 25km strike with investigations showing the presence of flake graphite in excess of 177Î¼m (80 mesh).
An optical mineralogical study showed between 16.25% and up to 43.28% of the flake graphite in the five samples to be larger than 212Î¼m (up to 1.7mm).
To put this in perspective, graphite prices are a function of two factors, flake size (a large flake is greater than 80mesh) and purity (high carbon is more than 94%).
Visual observations on in situ graphite mineralisation from trenching at Pencil Hill have shown flake size equaling 1mm in size.
Pencil Hill has discovered significant visual graphite mineralisation in two drill holes and visual graphite mineralisation in three trenches 1km apart.
The first hole had 95m of visual graphite, 5m visible from 8m depth and 90m visible from 15m depth.
Whereas hole two showed 86m of graphite from 35m depth.
Laboratory analysis included 77m at 6.37% total graphitic carbon from 8.49m in hole one including 10.85m at 13.69% TGC from 57.57m (5 % cut off).
Hole two’s results included 60.3m at 6.58% TGC from 61.21m, including 4.61m at 16.02% TGC from 95.6m (5% cut off).
“Visual inspection of drill holes has also shown additional deeper, graphite-rich sections not initially sampled,” Volpe said.
Should Bisan agree to acquire an interest in the Pencil Hill project, then the funds invested will be used to expedite an exploration program, with more drilling planned to test the significant graphite potential strike of at least 25km.
In addition to the graphite play, Bisan has also invested in another first, PFuel, a company that converts waste plastics and oils into energy/diesel.
“We were looking for investment opportunities and to take a position to help with continuous funding to take the businesses or projects to next level,” Volpe said.
Next year looks like it will be a busy year for PFuel with an IPO on the horizon and the PFuel plant being commissioned.
Volpe will keep looking for value adding investments for Bisan.
“We want to create value in ‘the new world’ materials such as graphite or energy alternatives such as technology to turn waste plastics back to diesel,” he said.
Volpe has big plans for Bisan, initially to raise funds to take up the option in Pencil Hill, before spinning off Pencil Hill on the ASX and then ultimately to see if the discovery can develop into a world class large graphite deposit.
*A version of this report, first published in the November/December 2014 edition of RESOURCESTOCKS magazine, was commissioned by Bisan.