Bringing you undervalued, high growth opportunities...
Energizer Resources Confirms Discovery of World’s Largest Graphite Deposit with 421.3 meters @ 6.12% C
- MOLO-12-01… 421.3 meters @ 6.12% C
- MOLO-12-01… 37.5 meters @ 6.11% C
- MOLO-12-01… 290.1 meters @ 6.08% C
Energizer released long anticipated assays to the drill intersections announced in early June and the results did not disappoint with the first hole of the resource delineation program at Molo intersecting 6.12% C over 421.3 meters. The results confirm that Molo and the surrounding Green Giant graphite camp is the largest graphite discovery anywhere in the world. This certainly makes Green Giant a potential cornerstone source of graphite production for the next century. It is hard to imagine anyone making a discovery that has all of the qualities that Green Giant possesses. Usually we talk about mine life in terms of 10 to 20 years, but on the Green Giant property, there is potentially enough graphite to mine for the next century. This discovery is a game changer for the industry. Green Giant will represent a reliable source of cheap graphite for the foreseeable future which assures both cost savings to auto manufacturers and more importantly security of supply, a major reason graphite is considered a ‘critical metal’.
The initial assays from drill holes and trenches confirm several important things about the Molo deposit…
- The deposit has a very consistent grade of 6% graphite over long intervals from surface indicating Molo will be a low cost open pit mine.
- Graphite rich mineralization has been confirmed to a 300 meter depth indicating substantial tonnage potential at the Molo graphite zone.
- Correlation between EM anomalies and graphite indicating several potential mine sites and potential unlimited resources and reserves capable of meeting a sustained long term demand curve
So how much graphite are we talking about?
25Mt @ 6% C between two trenches spaced 100m apart
More contained graphite than either Lac Knife or Bisset Creek
Energizer cut 358.5 meters grading 6.21% C in the trench we walked across while on site. 100 meters to the south EGZ intersected 325 meters @ 6.35% C. If you are any good with numbers, you will quickly calculate that within these two trenches averaging a 340 meter wide zone is 25 million tonnes of graphite ore at 6%.
1.5Mt of graphite over a 100m strike
I just want to drive this number home one more time...
1.5Mt of contained graphite within 100 meters… More graphite than either Northern Graphite’s Bisset Creek or Focus Metals’ Lac Knife. Why Energizer still trades at discount to its peers is a mystery to me. If anyone should trade at a discount, it should be EGZ’s peers trading to EGZ. No other deposit has the ability to ramp up like Molo. EGZ stated in the news release that they believe that Green Giant could produce up to 100,000 tonnes of graphite concentrate a year without any major infrastructure upgrades to the area. 5 times Northern Graphite’s planned production. A 100Mt deposit could produce 100,000 tonnes for 50 to 60 years or 500,000 tonnes for the next decade. If you project the results over the entire 850m by 300m zone the deposit grows to a whopping 200Mt when considered to a 300 meter depth. It is pretty easy to see how EGZ is on the verge of defining one of the largest graphite resources anywhere in the world. An initial resource estimate for Molo is due sometime in December. Less than 5 months away and a production date will not be much after that in 2013 or early 2014 (dependent on DRA’s timelines.)
In my humble opinion… no graphite deposit can hold a candle to Molo
Lac Knife and Bisset Creek mineralization fits within a 200m strike at Molo
To take another perspective on things and grasp an idea of the magnitude of the discovery at Green Giant…the entire mineralization at Bisset Creek or Lac Knife could fit between two trenches at Molo. You could stuff Bisset Creek into a 100 meter strike of Molo and then stack Lac Knife right next to it in another 100 meter wide zone. All the graphite that FMS and NGC have you can stuff within a 200 meter zone at Molo which barely makes up a ¼ of the deposit. It makes Bisset Creek and Lac Knife look pretty small when compared to the monstrosity developing at Molo.
200Mt @ 6% C is 12 to 13 million tonnes of graphite
More than 10 times the amount of contained graphite either NGC or FMS
Molo and its 200 million tonnes is just one anomaly within a camp that literally has 100’s of graphite occurrences and corresponding EM anomalies on the Green Giant property. When it comes to graphite and a reliable 21st century source…there is no other discovery potentially as significant to the entire industry as what EGZ is uncovering in Madagascar at Green Giant.
The numbers dwarf all other companies developing graphite deposits either with historical or NI 43-101 estimates in tonnage. The grade is impressive for tonnage that is usually associated with disseminated zones like Bisset Creek or Lac Knife. The combination of both grade and tonnage makes Molo a unique opportunity in graphite. It is a ground floor discovery that a reputable mine builder in DRA is planning to turn into a cash cow in operation and major source of cheap graphite. Mix in excellent purities and flake size that rivals Bisset Creek, you have your industry leader.
Below is a comparison of the 4 industry leaders who plan on producing graphite by 2014/2015.
| Company || Deposit || Tonnes (M) || Grade (C) || In situ C || Market Cap |
| Energizer Resources EGZ-T || Green Giant, Madagascar || 200Mt || 6% C || 12Mt || $47.8M |
| Focus Metals FMS-V || Lac Knife, Quebec || 7.9Mt || 15.5% C || 1.2Mt || $58.8M |
| Northern Graphite NGC-V || Bisset Creek, Ontario || 53.6Mt || 1.87% C || 1.0Mt || $55.2M |
| Flinders Resources FDR-V || Kringel, Sweden || 6.9Mt || 8.8% C || 610,000t || $63.8M |
While Graphite Prices Slide - Grade is King
Graphite prices have dropped over the last few months which would barely affect the bottom line of high grade operations like Green Giant or Lac Knife whose costs will be well under $1000 per tonne. The same drop in large flake prices is an entirely different story for Bisset Creek whose costs will average a little under $2000/tonne. A long term production decision at lower grading 2% projects is questionable without some sort of value added process like spherical graphite and is why Northern Graphite is working hard to perfect a value added spherical graphite process as well as spearheading graphene initiatives.
Deposits with higher grades are suddenly much more attractive considering graphite prices may have plateaued. No one is sure where graphite prices will end up in the short term or the long run; but at current prices graphite mining is quite lucrative for many operations mining higher grades. Grade always translates into low cost production. The high grade mines will still be able to flourish with costs well under $1000 per tonne. Gary Economo mentioned Lac Knife will produce graphite at less than $400 per tonne while a 6% to 7% mine could achieve $500 to $600 per tonne. In an environment where costs are escalating for every miner, it doesn’t matter if you’re mining gold or graphite, low grade projects become quite unattractive.
Energizer’s Molo… A World Class Source of Graphite
Energizer Resources Green Giant is an emerging world class graphite discovery whose metrics are shaping up to make Molo and Green Giant second to none. EGZ is the best of the bunch when it comes to graphite. The company should be valued (at a minimum) on par to the current industry leaders FDR, NGC and FMS.
Once production is achieved at Molo… the numbers will speak for themselves.
EGZ is early in the discovery cycle but is already the clear winner and will emerge as the leader when it comes to mining graphite. Green Giant a “no brainer’.
- Simple Processing - some of the simplest processing in the industry
- High Purity - product demonstrates a high purity which means premium pricing
- High Grade - outstanding grade means Molo will be a low cost producer
- Tonnage – being one of the largest graphite deposits in the world ensures both scalability and a long mine.
Molo is shaping up to become the biggest graphite deposit anywhere in the world. Green giant could potentially make up the largest concentration of graphite deposits found anywhere on Earth. The capacity to go from 100,000 to 500,000 to 1Mtpa is unmatched by what any other concentration of graphite deposits has to offer anywhere on Earth.
So far the results have been ‘Out of this world’ for this world class mineral discovery.
Beat the Market Stock Picks