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The following interview with CEO Paul Gorman of Great Lakes Graphite was conducted by phone and email in the week ended March 20, 2015. The views and opinions are entirely those of Mr. Gorman’s.

Great Lakes Graphite always seems to have a lot of balls in the air. With that in mind, can you give readers a description of where the company stands today?

At Great Lakes Graphite (GLK.V) (GLKIF) we have a laser focus on a single mission, to become a leading industrial minerals company in the North American market.  Towards that end, we have recently acquired a long term lease on a micronization facility that will enable us to begin delivering high quality industry standard micronized flake graphite products. The Lochaber Graphite project gives us covenant of supply as a potential long term source of natural flake graphite in a mining friendly jurisdiction that is very close to home.

Can you tell us more about the Micronization Facility? Could it possibly generate cash flow next year?

The Matheson Micronization Facility is an extraordinary asset.  We were extremely fortunate to find this facility and then quickly hammer out a deal with the owners. A deal that we believe works for all of us, I might add. In our corporate presentation we show that we are estimating about six months to refurbish and recommission the facility. On that basis we plan to generate cash flow from Matheson beginning in the second half of this year, with a ramp up to our targeted capacity by 2017.

How much capital will be needed to refurbish and commence operations? Will you need to raise additional capital this year?

We have estimated that about $1.2 million is required to refurbish and recommission the facility and also to finance initial inventory.  We will likely need to raise additional capital to cover the gap between where we are today and cash flow from the facility, but we have received expressions of interest recently from multiple funding sources. It looks like we have some attractive options available to us at this point.

Where will you source material to feed the the Micronization Facility?

We are in the process of finalizing supply arrangements and will be announcing the relevant details as soon as possible.

Great Lakes mentions Purification alongside Micronization. Are these 2 steps in the same overall process, or separate operations?

You can think of these various processes like steps on a value staircase. Each step up creates a higher value product, but it also costs more to produce it because of the additional time, energy and handling required. So run of mine material or raw flake graphite commands a certain price.  Micronized flake graphite is the very fine, or small flake size, run of mine material that has been processed further. Micronized purified flake graphite has undergone additional processing to increase the carbon content.

Would the Micronization Facility constitute a, “competitive and disruptive advantage by leveraging existing assets?” [Quote from Corporate Presentation]

Absolutely. It would have been impossible for us to build this facility any time soon. We don’t have the resources to even think about that. So the fact that we were able to get our hands on a facility like this and begin operations within months is truly remarkable. It would take at least $15 million to build this facility from scratch and two to three years of design, engineering, planning and permitting. By getting into commercial operations now, we are establishing a beachhead in the market and building relationships with customers that will become invaluable as Lochaber nears production.

Please tell us more about the status of Great Lakes Graphite’s Lochaber Graphite deposit? What are some catalysts to watch for at Lochaber?

Lochaber has the potential to become a long term supply of high quality flake graphite in a favourable jurisdiction that is close to home. After having acquired the property just a little over one year ago, we are now closing in on a resource estimate. SRK Consulting is performing the work on the estimate and we are continuing to target the end of Q1 for publishing the initial results of that work.

Even though Great Lakes might be able to get into graphite production for C$35 million, that’s still a big chunk of change. What funding options are you looking at?

Our internal projections – assuming we hit or come near our targets – are for the Matheson Facility to be generating significant cash flow by the time we are at a production decision for Lochaber. That kind of financial strength opens many doors and more options present themselves as the situation is increasingly de-risked and the path to cash flow shortens. The conversations we are having now are giving us cause to be optimistic about financing options that will be available for Lochaber.

In addition to pursuing Micronization and Purification, what else do you believe might set you apart from emerging graphite peers?

I guess I would say that most of our colleagues in the sector perceive themselves as junior mining companies and that’s fine. For the past two years now we have been very consciously branding ourselves as an industrial minerals company. That means our highest priority is to focus on those things that enable us to begin delivering products to customers and as soon as possible.

Can you give readers a snapshot of your capital structure including debt and cash?

The company has about 81 million shares outstanding and 107 million fully diluted. We are in the process of closing a private placement this week for 12 million units that is bringing in $300,000 in hard dollars and $300,000 in flow through dollars. The company has no debt.

To the extent that further acquisitions are being contemplated, what geographic areas and products (outside of graphite) might you consider?

We are really focused on the North American market. We have a big vision but we also think that execution in the beginning is absolutely critical. To that end, we are trying to keep it simple until Matheson is up and running, for example. Beyond that, we are interested in other energy minerals like lithium and cobalt. There are some intriguing cobalt showings at our Summit-Gaber property. There is also the potential to expand our relationship with Northfil and look at processing other industrial minerals at Matheson. So yes, there are lots of possibilities but we must focus on getting the basics done absolutely right, first.

Are there misconceptions about Great Lakes Graphite that you would like to address?

Yes. There seems to be a notion that because the company has not been around for very long that we must be new to the sector. Nothing could be further from the truth. While the team as a whole has only been operating as Great Lakes for a relatively brief period, we have people in this company that have deep experience in the sector. John Carter has built dozens of mills, for example, and has an enormous wealth of experience doing graphite processing. Our entire bench is deep in many areas.

The other misconception that seems prevalent is that because we have a small market cap we can’t be serious. I think there is a lag between the reality on the ground and the market’s perception. We have moved a long, long way from where we were until only recently. I just don’t think the market has really recognized what it is that we have assembled and where it is we are now prepared to go. That’s beginning to change but there’s still work to do!