Quebec Update: Graphite

In this instalment I want to take a look at some interesting news in the graphite sector. Quebec has some interesting resources, and the french media is starting to wake up to the economic potential.

Specifically, the graphite deposits in the northwest area near the north shore of the St. Lawrence has a few sites which promise to deliver high grade resources to a starving energy metal market.

Unfortunately, it seems all is not totally above board in the world of mining in Quebec. I present two cautionary tales.

Nouveau Monde boss slapped on the wrist, thanks to Jeanne in accounting.

Frrancis Halin in the Journal de Montreal has a report about the president of Nouveau Monde graphite being slapped with a 10K for three violations of Quebec securities law.

The President, Eric Desaulniers was fined because he ‘forgot’ to include 3 of 109 investors in their $1.2M placement. His defence was ‘clerical error’. He promises to be a good boy and not do it again.

His case is strengthened by the fact big institutional investors such as the Caisse de Depot et Placement (The government’s investment arm) supports the idea this was an actual administrative error, not some sort of malicious violation.

Let’s call it a yellow light, not a red light. Those Lac Gueret graphite deposits are just so sexy.

Link:  http://www.journaldemontreal.com/2018/03/23/le-president-de-nouveau-monde-graphite-devant-le-tribunal-des-marches-financiers

96 million dollar lawsuit by Grenville Graphite mine against small town

Both Radio-Canada and Le Devoir are covering the story of the Canada Carbone company’s ongoing $96M lawsuit against the small town of Grenville-sur-la-Rouge. (A real place. I’ve also been to Ste. Emilie de L’Energie, and St. Louis de-Ha-Ha) 

The Mayor, Tom Arnold (Not that one) has been meeting with the provincial government to try and deal with the issue.

The lawsuit was triggered when the newly elected city council changed zoning to stop development of the mine. I guess they expected to get paid, instead they got a lawsuit.

The bottom line here is under Quebec Law cities are backed by the Province. If the company wins the lawsuit, the Province has to pay. Motivation to bring both sides to the table.

This one is interesting because this is another promising graphite mine, and Canada Carbone is in the Catbird seat here. Rezone or cash payout, they win. This is the sort of news story investors should watch for the option to grab opportunities when they arise.

Links: 

https://www.ledevoir.com/opinion/editoriaux/522034/poursuite-de-96-millions-contre-grenville-terrain-mine

https://ici.radio-canada.ca/nouvelle/1089874/menace-de-poursuite-quebec-conseille-grenville-sur-la-rouge

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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