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In 2011 Peter Epstein, CFA, left a $3 billion hedge fund where he was a senior natural resources analyst to help increase awareness of a number of natural resource companies in which he's invested in. 

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Alabama Graphite Corp., Exclusive CEO Interview, What Makes This Company Unique?

Date: Tuesday, January 12, 2016 12:39 PM EST

Notwithstanding your experience in graphite, how can readers be confident that you’re not overly optimistic on this particular project?

Baxter: We don’t believe we’re being overly optimistic. We’ve intentionally tempered initial production plans at our Coosa Project in east-central Alabama to 5,000 Metric tonnes, “Mt,” annually in years 1-5. Details of our production profile and other key attributes can be found in our Preliminary Economic Assessment, “PEA.” If achieved, 5,000 Mt/yr, (75% or 3,750 Mt/year CSPG), would very easily be absorbed by the rapidly expanding battery market. 

The U.S. and global green-energy and clean-technology industries are experiencing widespread adoption. For example, the proliferation of electric vehicles, “EVs” including Faraday Future’s recently announced $1 billion EV plant north of Las Vegas and Tesla Motors’ $5 billion, ‘Gigafactory 1’ located outside of Reno — are, combined, planning to produce 700,000 EVs per year. Nevada has become the Western center of the new-age automobile industry. However, AGC is by no means a binary play, we will not allow a single company dictate our success. There are numerous other major lithium-ion battery, anode and stationary storage (battery) manufacturers in the U.S. — and AGC is currently preparing CSPG sample material for a number of potential end users.

If the dual-pronged approach outlined by the PEA is so compelling, why aren’t peers doing the same? 

Baxter: Simply put, a lack of CSPG expertise/experience, time and money. Many graphite development companies hope to upgrade a portion of their graphite concentrate to battery-grade, but may not have the CSPG engineering expertise to do so. If successful in upgrading a portion of production, companies would still be left with tens of thousands of tonnes of primary produced (unfinished) graphite concentrate to place into the market. Even if companies decide to pursue similar strategies to ours, an updated PEA and subsequent Feasibility Study would be needed. This would require significant time and capital, both of which are in short supply these days.

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Regarding competitors, we feel the market for conventional unfinished graphite concentrate outside of China is stagnant. I believe the conventional business model for flake graphite development companies (intending to produce traditional run-of-mine graphite concentrate of various flake sizes and purities) has become unsupportable for the foreseeable future. AGC plans to only sell products that are in demand today, most notably CSPG.

How do you respond to those who claim that a North American graphite company would not have the expertise to produce CSPG?

Baxter: Those who claim that only China has the requisite expertise to produce CSPG are incorrect. Although CSPG production is complicated, it is not rocket science. Though there is very little actual CSPG knowledge in the graphite development space (this is why most companies subcontract out CSPG-related work, usually to the Chinese) there is CSPG expertise in both Europe and North America. Further, the notion that the Chinese CSPG production process yields of  ~ 30%, precludes a team of North American CSPG experts of achieving better yields, is also incorrect. 

Engineering processes effecting the sizing and shaping of CSPG material can be significantly optimized to increase production yield. Expertise in order to achieve these efficiencies are a result of years of experience. My team have been working diligently on all aspects of CSPG production for more than half a decade and on numerous types of natural flake graphite. We look forward to releasing test results of our CSPG in coming weeks.

As in every major metal & mineral, China is a hugely important and highly uncertain force to be reckoned with. How could China make or break the graphite market? 

Baxter: Yes, China’s a wild card for sure, but only as it pertains to conventional graphite concentrate. China has flooded the market with commodities such as rare earths and graphite in the past; however, China is now intensely focused on reducing its heavy industry’s environmental footprint to combat air pollution. Further, China wants to add value domestically in order to address its government’s green-energy mandates. Additionally, consumers are increasingly holding manufacturers accountable for where they source their input materials and how those materials are produced. You can’t have a green car with a dirty battery. 

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