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Lynn Fosse, Senior Editor
Steve Alexander, Associate Editor
Bud Wayne, Marketing
& Production Manager
Christy Rivers -
Ceylon Graphite Corp.
+1 (604) 765-
Interview conducted by:
Lynn Fosse, Senior Editor
Published – January 31, 2022
CEOCFO: Mr. Baxter, what is graphite and why should people be interested in it?
Mr. Baxter: Graphite is pure carbon, the only two pure forms of carbon in the world are graphite and diamond. It is on the periodic table as C. It has been around forever. It is used in most things that you know, but may not recognize that it is there, such as walk around electronics, like cell phones and flat screen TVs. Graphite has the properties of being electrically conductive and heat conductive. The major industrial use of it from a heat standpoint is refractory steel making industries and all the things that go around dealing with molten steel and what not.
The interest in graphite and the reason we have an interest in graphite and the main market driver for graphite now is batteries. The anode in the lithium-
CEOCFO: Would you tell us specifically about Ceylon Graphite, and why Sri Lanka?
Mr. Baxter: Ceylon Graphite is listed in the TSX Venture, and the OTC and it was initially a graphite mining company but I took over as CEO in June, my background is mining and processing graphite for batteries. Our strategy is to become a mine-
CEOCFO: What happened?
Mr. Baxter: What happened was up until about the World War II, Ceylon at the time, now called Sri Lanka, produced a lot of the world’s graphite and had about 3000 small-
CEOCFO: What is involved in mining graphite?
Mr. Mr. Baxter: In the case of Ceylon Graphite in Sri Lanka, we have small-
Environmentally, it is very sound because not only do we not have the primary processing that is required for other flake graphite mines, but it is all underground and it is not the large-
CEOCFO: How did you choose the two mines you are working on now and how do you assess your best prospects?
Mr. Baxter: Because of all the past-
CEOCFO: Are you funded for your next steps -
Mr. Baxter: We will be raising some money soon; we are just looking to small offering in the very near term. The beauty compared to other mining operations and being small-
CEOCFO: The investment community understands for the most part?
Mr. Baxter: They are getting to understand. I am finding that more and more when people are talking about batteries and vehicles the talk almost always used to be about lithium, cobalt and nickel, but suddenly there has been a realization that the anode of the battery is graphite, so companies have announced factories and are looking to make all these batteries for Tesla, GM or Ford or whatever North American companies and most every European companies that are making electric vehicles now or moving towards electric vehicles do not have the inputs, so graphite is suddenly becoming an overnight realization that we need graphite and we do not have the ability to process it into battery material. Right now, China does 100% of the world’s natural graphite processing for batteries.
The COVID situation worldwide has really brought the light onto the supply chain and to realize that for example the capacity of the United States to process graphite for batteries is zero, China 100%, so there is a lot of rush to that. I have been at this for quite some time focused on processing for batteries. I first started working on thermal purification which is a more environmentally friendly process than the Chinese use which is acid. I have been at this since 2012 so I recognized this early on. We are focused on that aspect of it and that is where the tremendous demand is coming from.
CEOCFO: Would the process be done on-
Mr. Baxter: Sri Lanka will require a certain amount of value-
In every area such as North America, Europe and UK, we will be looking at having processing capabilities within their own borders. That is one of the lessons of Covid regarding critical supply chains. Even in conversations with Sri Lanka they are looking to do more within their own borders as well and maybe even develop a full battery industry. I think it is kind of fluid now and everybody is starting to realize that they want a piece of this, and Ceylon is positioned well to participate. We can make as much graphite as is going to be demanded of us.
We have enough ground, enough mine sites and grids in order to cover. Initially we are looking at 50 thousand tons but that could be 100 thousand tons or 400 thousand tons. It is up in the air what the demand is going to be. It is going to be quite an exciting couple of years.
CEOCFO: I am assuming Sri Lanka will stay friendly to the mining industry?
Mr. Baxter: Oh absolutely, I think the thing with Sri Lanka right now is they do need foreign investment. They do have some issues with foreign currency reserves now as we speak. In my meetings with government officials, they are very encouraging with what we are doing, very encouraging of looking to help streamline permitting aspects of things. It is very bureaucratic, they have taken the old English or British bureaucracy and piled on.
The chairman of the Mines Bureau talked about more and more mines, and I said we can do that but we need your help to streamline the permitting process so that we can do more mines quicker. They are quite open for that, and Sri Lanka is a beautiful country, it is a high tourist area but with Sri Lanka they are also looking to have some substantial industry. They do have a history of graphite mining, so they are looking to hopefully restore that and take advantage of this push.
CEOCFO: What challenges are you on the lookout for or that you can be proactive about?
Mr. Baxter: There are always issues that come into play. There can be some geopolitical issues. Right now, business travel with the COVID situation is an issue. I have been looking at going back to Sri Lanka in the near-
We do have some good financial backing and interest in what we are doing so that takes a bit of the pressure off. I think it is also a question of growing the company and getting the legs under that we need. In our case we have a good core technical team. Being an engineer myself, that is my main worry is producing and doing what we say we will do which I am confident we can.
CEOCFO: Is there anything potential investors might miss when they look at Ceylon Graphite that they really should recognize?
Mr. Baxter: I think just the fact that they looked at Ceylon before or that they have interest in batteries now, graphite has been overlooked. Since I have taken over, I have made it very clear that we are a mine-
There are a lot of players out there that may talk the talk, but we walk the walk. We know what we are doing and have some pretty good battery results and we will continue to grow that. Look at our technical staff, what we can do, our team is strong. We may be a small company now, but the potential is tremendous. We are quite undervalued now so I think that someone coming into the stock now will be pleasantly surprised in my opinion for the potential of the share price.
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“Talking about batteries and vehicles the talk almost always used to be about lithium, cobalt and nickel, but suddenly there has been a realization that the anode of the battery is graphite.”