Graphite One Resources Stays Investment-Ready with Firmex

This case study showcases how a virtual data room for a junior mining company helped it obtain fundraising by streamlining the investor due diligence process.

Virtual Data Room for a Junior Mining Company | Firmex

Graphite One Resources Inc.

What They Do
Junior mining company (Exploration and development)

Market Focus
Graphite mining and processing for use in lithium ion batteries.

Recent Financing
$707,185 financing completed December 5, 2017
$678,800 financing completed August 24, 2017

How Firmex has been used
Fundraising, Investor Due diligence

About Graphite One Resources

If your familiarity with graphite begins and ends with the No. 2 pencils you used in school, you might be surprised to learn that the anode in lithium ion batteries is made out of graphite and there are substitutes. The lithium ion battery pack that powers the Tesla S-class electric car, for example, contains about 85 kg of graphite.

The global demand for graphite continues to grow, as does the need for domestic U.S. sources at a time when the U.S. is 100% import-dependent for its graphite supply. The U.S. government lists graphite as a “Supply Critical Mineral” that is strategically important for high-tech, green-tech and national security applications.

Graphite One Resources Inc. continues to evaluate its Graphite Creek Project, which could see the company become an American producer of high grade Coated Spherical Graphite primarily for the lithium-ion electric vehicle battery market. The project, located about 50 miles from Nome, Alaska, is a large graphite deposit in the US and could supply the nation’s graphite needs for decades. 

“The graphite that we are hoping to get out of the ground will be used as a main component of lithium ion batteries which ultimately end up in electric vehicles and long-term energy storage units,” explains Alan Ahlgren, Chief Financial Officer and Corporate Secretary, Graphite One Resources Inc. “One of the strategic selling points for Graphite One is that we are one of only two potential domestic U.S suppliers of battery-grade graphite.”

Earlier is Better Than Later

In December 2017, Graphite One announced the successful completion of a CA$707,185 financing. This followed a $678,800 financing completed in August 2017. The net proceeds from these private offerings are used for the ongoing exploration and development of the Graphite Creek Project and for general working capital purposes. 

Long before these financing rounds were completed and made public, Graphite One had prepared the way for successful fundraising by implementing a Firmex virtual data room to organize and share confidential information for investor due diligence.

“We are equity financed, which means that we are constantly looking for funding – this is the joy of the junior mining sector and any startup,” Ahlgren says. “Exploration and development requires a lot of capital. We need to complete environmental studies, engineering studies, mineral testing, and design work for the mine, infrastructure and processing plant. An exploratory drill program alone can easily cost 3-4 million dollars a year.”

“We never know when the next investor will want to look at the data room, so being ready is extremely important, especially when we’re talking to large private investors with decades of mining experience,” says Ahlgren. “If an investor calls us up tomorrow and says they want access to our data room for diligence, we don’t want to have to scramble or delay. We want to be ready to invite them into the data room at a moment’s notice.”

The Solution

Prior to Graphite One, Mr. Ahlgren served as CFO and Corporate Secretary with AQM Copper Inc. and previously with First Coal Corporation until its purchase by Xstrata Coal Canada. At all three of these companies, Ahlgren led the decision to implement Firmex.

“My experience with Firmex goes back to 2010 when First Coal was seeking new investors,” Ahlgren says. “Many of the target prospective investors were located offshore which presented significant time zone differences. Using a combination of email and FTP, First Coal was finding it increasingly challenging to accurately track and control the flow of confidential documents, some of which were very large including detailed 3D models. First Coal was also looking to present their company to potential investors in a highly professional way and we knew that a virtual data room would provide the document tracking, security, control and professional presentation we needed. First Coal went with Firmex because the solution was secure, easy to use and provided excellent value.”

“When the time came to choose a virtual data room service for Graphite One, I didn’t spend a lot of time shopping around,” Ahlgren says. “Firmex was my first and only recommendation. Obviously, I was happy with Firmex and I knew we could trust the solution to do what we needed it to do. I called up Firmex and the data room was up and running within a day.”

“With the Firmex data room set up and ready to go, we could take our time to build out the folder structure, make sure there wasn’t any duplication in where we were putting documents, and that we weren’t missing any information that would be critical to a potential investor,” Ahlgren says. 

“My colleague Doug Smith, who was also with me at First Coal, put together an outline of the structure we needed in the data room,” Ahlgren continues. “Our outline was based on what we’d learned at First Coal about how best to present the company. We wanted to make sure that the technical documentation we provided was comprehensive, organized in a logical way, and easy for potential investors to access and review.” 

“While security was our top priority, value for money was also a factor in our decision to go with Firmex,” Ahlgren says. “I could probably have spent more on a competitor’s data room that may have had a few more bells and whistles. Maybe. But junior mining companies need to be extremely cost-conscious, and Firmex does everything we need it to do. Frankly, it has more features and functionality than a company of our size will likely ever need. The platform is intuitive, flexible and fairly priced.”

“Firmex is a very customer-focused company that is easy to do business with,” Ahlgren says, “The Firmex team has years of experience under their belt. When Xstrata Coal was finalizing its deal to acquire First Coal back in 2011, the transaction was quite complex in terms of the permissions required. We had a large number of lawyers and engineers who needed access to only certain documents in the data room. We relied on the Firmex client services team to advise us on how best to organize and set up permissions to ensure document security and control.”

“Even if you’re not the most technically-savvy individual, Firmex makes it easy to drag and drop files to upload documents and access folders and files. Over time, Firmex has enhanced the product in ways that have increased its value proposition. The platform keeps getting better with monthly updates and new features that are very useful.”

Alan Ahlgren, Chief Financial Officer and Corporate Secretary, Graphite One Resources Inc.

A Barometer for Investor Interest

“The ability to track data room activity and see what documents people are looking at using Firmex’s reporting functions is insightful in helping us gauge how serious potential investors are,” says Ahlgren.

“If we have someone spending two and a half minutes in the data room, we know they’re probably not all that interested,” Ahlgren continues. “But if we have another investor fishing around for four weeks straight looking at documents, clearly they have more interest.”

“It’s also handy to see the specific documents people are looking at because it gives us an indication of where they see the risk in investing,” Ahlgren says.

One Solution, Unmatched Versatility

“The beauty of a Firmex unlimited-use subscription is that you can use the virtual data room anytime you want to securely share documents with the outside world. A Firmex subscription offers a solid value proposition for clients because the potential uses cases go well beyond due diligence. Whenever you need to organize documents so that they can be easily found, while controlling access, Firmex is worth considering as a go-to solution.”

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What business problems are you solving?

Alan Ahlgren: “We were at a stage where we were looking for significant institutional investment to fund some of the technical and preliminary studies we needed to kick off. We didn’t know how many large investors were going to come on board that would need to start doing due diligence. We set up the Firmex virtual data room because we needed a secure environment where we could disclose confidential information to potential investors without having to worry about sensitive documents floating around or falling into the wrong hands.”

What do you like best about Firmex?

AA: “In almost a decade of using Firmex at three different companies, I don’t recall ever having to wait any length of time to get an answer to my questions. When I phone Firmex support, I get someone at the other end immediately who has the skills and knowledge to resolve my issues. It’s refreshing not to have to deal with the call center shuffle that you get with other vendors. With Firmex, I know I’ll get the right answer right away so I can get things sorted out and move on.”



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