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Hexagon Resources tests show potential for standalone downstream graphite processing

Test outcomes on McIntosh flake graphite also include the ability to produce synthetic diamonds.
Test work images of McIntosh graphite
SEM images of McIntosh graphite before milling (left) and after air milling passes

Hexagon Resources Ltd’s (ASX:HXG) ongoing test work is delivering excellent technical outcomes which have potential to underpin a standalone downstream graphite processing business.

Extensive test programs are focused on particle milling and micronisation technologies and the production of ultra-fine materials using graphite from the McIntosh joint venture project in WA.

This work is also assessing the utilisation of these milled products in new-age batteries.

READ: Hexagon Resources updates McIntosh flake graphite resource; 81% classified as indicated

Hexagon has a strategy of manufacturing and selling a diverse range of graphite materials into several different market segments including batteries and various industrial applications.

Milling trials have shown rapid particle size reductions to a nominated median D50 size specification, which infer industry sector-leading milling costs.

These trials demonstrate that the milling cost advantages of McIntosh flake compared to typical African or Chinese sourced flakes is likely to be 2-3 times lower for hammer milling and about two times lower for air milling.

The various size classifications of the micronised products have wide application in a range of battery chemistries as conductivity enhancement materials and the ultra-fine, high purity materials at sub 5 μm sizings as coatings and dispersions in battery and industrial applications.

Hexagon said this was a very high-value market, served by a very limited number of manufacturers.

Production of synthetic diamonds

The outcome of the tests also includes the ability to produce synthetic diamonds from McIntosh flake.

These diamonds are currently of technical grade quality but there is also the potential to produce gemstone quality, subject to the highest purity precursor material.

A significant market exists for quality synthetic diamond precursor to underpin industrial applications for technical grade diamonds.

Appearance of synthetic diamonds after synthesis - (a) billets of graphite, unreacted catalyst and diamond; (b) large crystals  

of cultured diamond embedded into the middle of the billet; (c) synthetic diamond dust before gold sputtering.

Outcomes from the company’s test programs will be fed into an ongoing downstream scoping study which is examining the viability of a standalone downstream graphite products manufacturing business.

Market investigations were undertaken for the various planned graphite products focusing on specifications, utilisation, market depth and pricing.

This has resulted in compilation of a conservative pricing matrix for the scoping study.

READ: Hexagon Resources leverages 5-nines graphite purity for downstream refining business

The scoping level assessment of the downstream business assumed is regarded by the company as a fully autonomous, long-term industrial business.

Hexagon plans to utilise its reported graphite concentrate feedstock price of US$1,504 per tonne highlighting its goal that this would be a standalone business, securing feedstock at arm’s length commercial rates.

Market opportunities

Product marketing assumptions in the study are being based on a vast body of ongoing technical work commissioned by Hexagon, which is highlighting market opportunities in the USA and Europe as well as in Japan, Korea and China.

It is a highly concentrated market space with many of the premium end sectors supplied by just a handful of manufacturers.

READ: Hexagon Resources has McIntosh graphite resource update and scoping study in sight

Tests to date support Hexagon’s plans to manufacture a range of high-end graphite products into a diverse group of value-added industry segments, subject to ongoing positive test work and feasibility study.

Recognising the marketing challenges ahead, the product prices to be modelled are well skewed toward the lower half of the estimated product price range.

Hexagon has a 49% interest in the McIntosh Joint Venture, which is the subject of a feasibility study being undertaken by 51% partner, Mineral Resources Limited (ASX:MIN).

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