Many different metals and minerals have generated speculative excitement from investors during the last few years. It now appears that graphite is getting attention as yet another critical raw material for numerous applications such that a potential shortage of supply is now pushing up prices. Graphite prices have nearly tripled since 2005, a trend that has encouraged several junior mining companies to take on exploration projects with leverage to the mineral. One emerging graphite player is Strike Graphite Corp. Last week the company announced a transaction to acquire the Wagon Graphite Project in Quebec, a prospective property area with historic exploration work that has confirmed showings of graphite hosted within favorable geology. This week, the company reported that an aerial electromagnetic survey at its Simon Lake Project in Saskatchewan has identified a large trend of favorable geology extending more than 25 kilometers across the property. Simon Lake also has documented historic exploration work from a prior operator that encountered significant graphite zones in several drill holes completed in the 1960s and 1970s.

There are a handful of companies now active to define graphite deposits that may be the leading candidates for new mine development in the years ahead. Within such a small subsector, the potential for a rapid uptrend to the market value of these companies is very real as more people learn about the uses for graphite and the strong fundamentals. Zimtu Capital is a project generator that appears to be in early on the trend for graphite and the company has been involved in several deals to spin off properties to companies like Strike Graphite. This is a lower risk way to build leverage to the sector as Zimtu gains cash and shares of the partner companies through these transactions, and is therefore linked to the performance of these partnerships without facing the direct exposure and risk to fund exploration work.

Mike Kachanovsky

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