Exiting company 'still on the hook' for NOHFC money.

• Position: NEWS

Great Lakes Graphite, an emerging producer of synthetic graphite, hinted it will make good on repaying a provincial loan used to refurbish a northeastern Ontario crushing plant.

Last July, the provincial government announced the Toronto-headquartered company received a $412,000 combined grant and loan through the Northern Ontario Heritage Fund (NOHFC) to make improvements to the Matheson micronization facility, owned by Northfil Resources.

The NOHFC funding came in the form of a 30 per cent grant and a 70 per cent non-revolving term loan of $288,652.

Earlier this month, Great Lakes Graphite suddenly announced it was terminating an agreement with Northfil and was heading to Pennsylvania to start commercial operations with a U.S. partner.

The funding was earmarked to refurbish the mill--which formerly processed vermiculite--to micronize graphite, which grinds the material into a fine powder. The plant had not operated since 2004.

In a brief email, Paul Ferguson, Great Lakes Graphite's chief marketing officer, acknowledged the company still has a loan to repay for those improvements.

"The plant is now just about ready to be commissioned, so the money allocated by NOHFC was very well spent, in my opinion. Plus, we are still on the hook for the loan portion of financing. That doesn't go away just because we are relocating."

The original company plans were to ramp up production to 10,000 tonnes a year by the fourth year of operation. At peak capacity, the operation would have employed 16.

At the time of the July 21 funding announcement, Great Lakes Graphite CEO Paul Gorman stated the investment came at a "pivotal moment" as they prepared to enter commercial production.

"That will ensure we have a long-term future in Matheson...