E-Power Resources: Perfectly positioned for dramatic growth in graphite demand

Concerns about whether there will be enough batteries available for the many electric vehicles that will soon be driving on our roads have already caused the price of lithium to rise sharply twice in recent years. Investors have overlooked the fact that although car batteries do indeed require a lot of lithium, the demand for graphite is even greater. E-Power Resources (CSE: EPR / WKN / A3CL8W / FRA 8RO) is committed to securing this demand in the long term. To this end, the company is developing the Tetepisca project, a first-class graphite property in the Canadian province of Québec.

The battery of every electric vehicle contains between 50 and 100 kilograms of graphite, depending on its size. The problem here is that more than 70 percent of the graphite required worldwide currently comes from the People’s Republic of China. Western countries will therefore have to build up their own deposits and processing plants over the next few years if they do not want to become permanently dependent on China for battery materials as well.

E-Power Resources has set out to play its part in closing this gap as quickly as possible, as the company is developing graphite resources in the Canadian province of Québec. Compared to other competitors, the company has the advantage of operating not only in a legally secure Canadian province, but also in one that is very mining-friendly. And this advantage is of crucial importance in times when the approval processes are becoming increasingly difficult and already represent one of the greatest challenges for mine developers.

E-Power Resources is primarily focused on its flagship Tetepisca project. It is located in the North Shore region around 300 kilometers north of the city of Baie-Comeau and part of the Tetepisca Graphite District (TGD), which overall has reserves of 4.7 million tons at an average grade of 27.8% graphite and measured and indicated resources of > 100 million tons at an average grade of 14% graphite!

A good portion of this has been proven up by E-Power Resources neighbor Nouveau Monde Graphite, but E-Power Resources is the largest claim holder in the entire Tetepisca Graphite District!

High potential for discovery of a flake graphite deposit

E-Power Resources is aiming to discover and develop flake graphite deposits at its Tetepisca project. The location of the project is extremely favorable for this, as large parts of the resource are part of the Nault Formation. This is a sequence of highly metamorphic sedimentary rocks and is considered to be extremely advantageous geologically.

The known graphite mineralization also correlates directly with zones of high conductivity from past airborne electromagnetic surveys. And potentially economic graphite grades and thicknesses have also been realized in historical work. In addition, the carbon as graphite grades in the samples are comparable to the resource grades in the district.

For all these reasons, E-Power Resources is therefore convinced that the potential for the discovery of a flake graphite deposit at the Tetepisca project is very high. This is of course supported by the company’s exploration results to date. Be it samples from the 2019 to 2021 activities, the results of the Mag-EM surveys from 2022 or the drill results from 2023 – everything already points to exceptionally high graphite grades.

Exceptional success in 2024

And the 2024 season in particular confirmed this. It was only at the beginning of October that E-Power attracted attention again with the discovery of new zones of graphite mineralization defined by a series of samples containing up to 37% graphite (Cg = graphitic carbon)! And in the summer already, CEO James Cross’ company had detected 34.8% Cg in samples from newly discovered graphite rock trends.

Promising results from advanced exploration

In 2024, E-Power also extracted 1,037 kilograms of material across four bulk samples from three graphite outcrops. Field duplicate samples of 2 to 3 kilograms each, taken from each of the bulk sample excavation sites, returned graphite values that match – or even exceed – the average Cg content of the deposits in the Tetepisca district (approx. 14%)!

Ongoing work on these samples includes mineralogical studies using reflected and transmitted light petrography and a scanning electron microscope, as well as metallurgical test work. Preliminary mineralogical results document the frequent occurrence of large to giant graphite flakes that are free of inclusions. The results of the metallurgical test work include graphite concentrate with a purity of 96.5 % and 96.4 %!

This material, produced in collaboration with partner Volt Carbon, is already to be sent to battery manufacturers, who can then carry out tests to determine whether the product is suitable for their purposes. Later, a large sample of 30 tons will be taken, subject to approval, so that E-Power has a stock of material that can be processed into graphite concentrate on request and made available to battery manufacturers for testing.

Advantage flake graphite

Flake graphite occurs as isolated, flat, plate-like carbon particles with either hexagonal or angular edges. It occurs in metamorphic rocks such as marble, gneiss and schist and is either evenly distributed throughout an ore body or occurs in concentrated, lenticular pockets. Today, flake graphite is one of the most sought-after types of graphite, mainly due to its applications in the automotive industry.

What is important for investors is that flake graphite can also be used for applications other than lithium-ion batteries. Although flake graphite is a key component of the lithium-ion batteries used in electric vehicles, its use is by no means limited to the manufacture of car batteries.

The example of a Nissan Leaf shows just how important flake graphite is for the automotive industry. Its battery requires 55 kg of graphite. This graphite does not fall from the sky. It either has to be extracted via mining or, alternatively, can be produced synthetically. The synthetic production of flake graphite from petroleum coke, a by product at oil refineries is possible in principle.

However, the process is complex and expensive, as it requires high temperatures. In addition to the high costs, the unavoidable adverse effects on the environment also speak against synthetic production. At present, synthetic graphite production is therefore not a good alternative to the extraction of flake graphite from nature in our opinion.

Car manufacturers are installing ever larger batteries

The chosen example of a Nissan Leaf is still quite favorable in terms of resource requirements. In 2020, the German Automobile Association (ADAC) calculated that 6 kg of lithium, 10 kg of manganese, 11 kg of cobalt, 32 kg of nickel and 100 kg of graphite are required to produce a 50 kWh battery for an electric car. However, the current trend is towards larger batteries and therefore a longer vehicle range.

Tesla’s Model 4 RWH has a 60 kWh battery, which indicates a graphite requirement of over 100 kg, and Nissan has been offering the Nissan Leaf with either a 40 kWh battery or a 60 kWh battery in the USA since 2023, which increases the graphite requirement per battery to 80 to 120 kg, depending on the type.

In 2021, China brought 63% of the global graphite supply to the market. The Middle Kingdom’s graphite production was therefore higher than that of other countries, with Madagascar (8%), Brazil (7%), Mozambique (7%) and India (5%) following behind. Canada produces less than 1% and the USA produces no graphite at all. By 2023, China produced 77% of all natural graphite worldwide!