MIKE ROSENSTREICH

HEXAGON RE­SOURCES

The Australian Mining Review - - FRONT PAGE -

Graphite is an of­ten over­looked in­gre­di­ent in bat­tery man­u­fac­ture, and ju­niors like Hexagon Re­sources are ready­ing to take ad­van­tage of fu­ture de­mand. Cameron drum­mond spoke with Hexagon man­ag­ing di­rec­tor Mike rosenstreich about his ex­pe­ri­ences in the min­ing in­dus­try and graphite as an emerg­ing prod­uct.

Q. What is your ed­u­ca­tional and pro­fes­sional his­tory?

I con­sider my­self to be a spe­cial­ist gen­er­al­ist; start­ing from a strong tech­ni­cal back­ground I then gained credit skills as re­sources banker and then merged that ex­pe­ri­ence to build­ing min­ing busi­nesses.

In the early 1980s I fell into ge­ol­ogy al­most by ac­ci­dent, pushed by a love of the New Zealand wilder­ness and an in­tro­duc­tion to the head of Otago Univer­sity’s Ge­ol­ogy Department.

In NZ it wasn’t seen as much of a ca­reer path un­less you liked coal or were pre­pared to travel. I trav­elled – about 100km north of Dunedin, when US ma­jor Homes­take Gold of­fered me my first job at the Macraes gold project, I think DDH 3.

Homes­take shaped my early ca­reer with ter­rific op­por­tu­ni­ties in WA and Queens­land in ex­plo­ration, ad­vanced projects and pro­duc­tion over eight years.

I com­pleted a Masters of Min­eral and En­ergy Eco­nom­ics and joined Roth­schild, a bou­tique lender and in­vestor in the Aus­tralian re­sources sector.

I cov­ered tech­ni­cal and credit is­sues, work­ing on projects all over the world, across a wide range of com­modi­ties. That was a pretty piv­otal point in my ca­reer.

In 2004, I joined Bass Met­als as CEO. We ac­quired projects in Tas­ma­nia and de­fined high-grade poly­metal­lic re­sources, made ex­cit­ing new dis­cov­er­ies and had five years of Cu-Pb-Zn-Au-Ag pro­duc­tion.

Af­ter leav­ing Bass in late 2013, I set up a bou­tique con­sul­tancy, link­ing tech­ni­cal and fi­nan­cial as­pects of re­sources projects.

Q. Tell us about your cur­rent role.

In early 2017, I was asked to join Hexagon as man­ag­ing di­rec­tor to bring a more commercial, de­vel­op­ment-fo­cused skill set to com­mer­cialise the McIntosh flake graphite project lo­cated in the Kim­ber­ley re­gion of WA.

Graphite isn’t so much a com­mod­ity as a prod­uct, and our chal­lenge is to en­sure that we un­der­stand what cus­tomers want and then de­ter­mine through our test work and process de­signs how we can meet those spec­i­fi­ca­tions.

My role in­cludes de­vel­op­ing a de­fin­i­tive fea­si­bil­ity study and se­cure off­take and project fi­nanc­ing so that we can get into pro­duc­tion as soon as prac­ti­cal. We are fo­cussed on be­ing part of this cur­rent en­ergy and tech­ni­cal ma­te­ri­als revo­lu­tion, and graphite is a core com­po­nent of that.

Q. How is de­vel­op­ment work at Hexagon track­ing?

It’s im­por­tant to em­pha­sise that our suc­cess largely de­pends on meet­ing key tech­ni­cal mile­stones on the com­mer­cial­i­sa­tion path. This year we have com­pleted the first PFS level study for a start-up phase of the project; with NPV of $260m and IRR of 46 per cent from an an­nu­alised pro­duc­tion rate of 100,000tpa of high-grade flake con­cen­trate; and pre­lim­i­nary bat­tery re­lated test work on sec­ondary pro­cessed bat­tery an­ode feed­stock – all of which came up pos­i­tive.

We’re also de­vel­op­ing our mar­ket­ing strat­egy.

Our ad­van­tages are a clean ore-type and a nat­u­ral coarse flake en­dow­ment which should en­able us to di­ver­sify our prod­uct mix from the PFS de­fined “one prod­uct for bat­tery an­odes” to po­ten­tially two prod­ucts with the sec­ond, large flake prod­uct aimed at the ex­pand­able graphite mar­ket.

Q. Where would you like to see Hexagon in five years?

Es­tab­lished as a ver­ti­cally in­te­grated sup­plier of high-pu­rity, pre­mium bat­tery re­lated min­er­als, ob­vi­ously graphite, maybe ex­tend­ing to cobalt and other met­als.

McIntosh gives us lever­age to get into pro­duc­tion, then de­velop down-stream value-add op­por­tu­ni­ties.

Q. How im­por­tant is graphite to the new strate­gic met­als boom?

Vi­tal. “Lithium ion bat­ter­ies” is a mis­nomer! They are “graphite-nick­el­lithium ion cobalt” bat­ter­ies. While the tech­nol­ogy is chang­ing fast, graphite is the dom­i­nant an­ode ma­te­rial and there is 5 to 10 times more graphite than Li and Co in a lithium ion bat­tery.

The de­mand in this sector is huge and, in my view, un­der­es­ti­mated.

There is a strong price im­per­a­tive for man­u­fac­tur­ers to in­crease the pro­por­tion of the cheaper nat­u­ral flake graphite to syn­thetic graphite in an­odes from the cur­rent level of 30 per cent, and our be­lief is that this will in­crease de­mand sig­nif­i­cantly as nat­u­ral flake has en­hanced elec­tro-chem­i­cal at­tributes.

As up­stream pro­duc­ers, our chal­lenge is to demon­strate re­li­able pro­duc­tion, at scale, of con­sis­tent high-qual­ity nat­u­ral graphite and from sta­ble ju­ris­dic­tions such as Aus­tralia to cre­ate a low-risk pro­cure­ment chain for end users.

“We are fo­cussed on be­ing part of this cur­rent en­ergy and tech­ni­cal ma­te­ri­als revo­lu­tion, and graphite is a core com­po­nent of that.”

Q. What is the best piece of ad­vice you have been given over your ca­reer?

I like to think that my “ears are not or­na­men­tal” so I have heeded nu­mer­ous snip­pets of ad­vice over my 34 year ca­reer.

In bank­ing I learnt the con­cept of risk and re­ward, which is fine in ex­plo­ration. But in de­vel­op­ments and ac­qui­si­tions I fo­cus on risk and re­gret; seek­ing to min­imise the po­ten­tial for re­gret as much as pos­si­ble.

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