Option 1 states that both statements are individually true and Statement II is the correct explanation of Statement I. Let`s examine each statement individually.

Statement I states that the granules of modern gunpowder are typically coated with graphite. This is true. Graphite is used as a coating on gunpowder granules to reduce friction and ensure a more consistent burn rate.

Statement II states that graphite prevents the build-up of electrostatic charge. This is also true. Graphite is a good conductor of electricity and can help dissipate any electrical charge that may build up on the gunpowder granules during handling or storage.

Now, let`s evaluate if Statement II is the correct explanation of Statement I. Indeed, graphite`s ability to prevent the build-up of electrostatic charge is a likely reason why it is used as a coating on gunpowder granules. Electrostatic charge can be dangerous as it could potentially ignite the gunpowder prematurely. Therefore, coating the granules with graphite helps to prevent this hazard.

In conclusion, both statements are true, and Statement II provides a valid explanation for why graphite is used as a coating on gunpowder granules. Therefore, option 1 is the correct answer.