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I recently read an article entitled, “Graphite One is Dead Money.” The author did a good job of pointing out the attributes of the Graphite One Resources (GPHOF) story. And I commend the writer for writing a balanced piece considering both the pros and cons in a measured way. He mentions Graphite One's massive flake graphite project called, Graphite Creek in Alaska, USA.

For example he said,

“it is not implausible that the resource could grow substantially from the most recent estimates to become the largest graphite resource in the world.”

The author also pointed out that trading volume in the stock is high. Further, the deposit was described as close to surface and, “it appears to have the potential to be a very low-cost mine in the future.” However the author is betting against Graphite One, saying that the company is,“unattractive except in the most optimistic scenarios for graphite prices.”

In my opinion this author in going through his list of negatives about Graphite One is really just speaking to the generic risks of most junior graphite companies. For example he says,

“maximizing leverage to the graphite space using graphite junior mining shares as option-proxies makes sense only to a very limited extent. Not only that, but it takes a fairly unique set of qualities to make a graphite junior attractive…”

Any investor in graphite juniors needs to know this is a high risk, high return sector. Still, it's better to be a U.S. domiciled company like Graphite One then a third-world or Chinese producer. Right now, virtually all Venture-listed stocks have been hammered, perhaps in part due to tax loss selling. I feel the author could have taken any number of graphite and other sector stocks and picked them apart. It's easy to play devil's advocate.

I will now attempt to refute some of the statements made by this author. For example, he described Graphite One as an early-stage flake graphite company due to a small number of drill holes. I would not call this an early-stage project by any means given that it has a giant inferred resource and is soon coming out with a new resource report that will include a portion of indicated resources. Would the author instead want Graphite One to have spent additional capital to drill many more holes when they have already found so much? CEO Anthony Huston had this to say about the stage of development of the Graphite Creek deposit.