Big North Graphite Corp. (TSXV:NRT) signed a letter of intent with MAG Exploration Services Inc. to acquire all of the shares of Grafito de Mexico, S.A. de C.V., held by the Vendor (which shares represent 97.5% of the issued and outstanding share capital of Grafito, the registered and beneficial owner of the El Tejon property.
As quoted in the press release:
The El Tejon Property is the only flake graphite mine to have produced in Mexico. The mine and mill were originally built in 1980 by the Government of Mexico. In 1989, a second processing line was installed to increase the capacity to approximately 4400 tonnes per year of finished graphite. El Tejon was an open pit mine, and the mill was used to crush, mill, float, dry, screen and pack final product. The mine was operated by the Government of Mexico until 1988 and was run privately from 1988 until 2002. The mine closed in 2002, due to low graphite prices. At the time of closing, approximately 80% of the graphite produced was sold to the USA. Historically, the mine produced approximately 20% large flake graphite and 80% medium and fine flake graphite.
Big North Graphite President, Spiro Kletas, said:
We are very excited to add this project to Big North’s portfolio of graphite assets. Our strategy has been to be among the first to be able to supply graphite to the market. Not only does the El Tejon Property represent near term production potential, but also the ability for the Company to fast track our entry into the flake graphite market. The project is in an area of good infrastructure and access and has a readily available workforce in the vicinity. As a past producer, many of the infrastructure needs of a mining project have been previously addressed. Further, this tends to limit cap ex required to begin production. We believe that this project will be an excellent compliment to our current amorphous graphite projects in Sonora State and, as they contain different types of graphite, will supply different markets. Further, the Company believes that there is significant expansion potential for the mine and mill.