Mr. James Brown reports
MILL CITY CORPORATE UPDATE
Mill City Gold Corp. would like to take this opportunity to update its shareholders with respect to the company's plans for 2012. In this regard, Mill City has been actively pursuing other mineral exploration projects. Over the past several months it has witnessed a tremendous interest in graphite. The company is currently in discussions with a number of parties in an effort to pursue what many believe to be such a promising resource sector.
Graphite prices have been increasing in recent months, and over the last couple of years, prices for large-flake, high-purity graphite have more than doubled.
China, which produces 70 per cent to 80 per cent of the world's graphite, is seeing production and export growth levelling, and export taxes and a licensing system have been instituted. Quality is declining as surface oxide deposits are depleted, resulting in increasing costs as mines go deeper. Supply suffers from the seasonal closure of mines in northern China over winter.
Global consumption of natural graphite has increased from approximately 600,000 tonnes in 2000 to 1.2 million tonnes in 2012. Demand for graphite has been increasing by approximately 5 per cent per year since 2000 due to the continuing modernization of China, India and other emerging economies, resulting in strong demand from traditional end uses such as the steel and automotive industries. Graphite also has many important new applications such as lithium ion batteries, fuel cells, and nuclear and solar power that have the potential to create significant incremental demand growth. There is 10 times to 20 times more graphite required by weight to produce a lithium-ion battery than there is lithium. Demand for graphite is expected to rise as electric vehicles and lithium battery technology are adopted as well as increasing uses in new technology applications.
A recent European Commission study regarding the criticality of 41 different materials to the European economy included graphite among the 14 materials high in both economic importance and supply risk (Critical Raw Materials for the European Union, July, 2010).
Investor interest in graphite has been growing. Last December, the company saw the first graphite conference in London, United Kingdom, presented by on-line journal Industrial Minerals. In February, 2012, the company saw the Graphite Express Conference in Vancouver with an additional graphite conference scheduled for Toronto in May, 2012.
Mill City will continue to keep shareholders informed as these discussions progress.