TORONTO (miningweekly.com) – Madagascar-focused project developer Energizer Resources on Wednesday announced that it had concluded a transaction that consolidated its full ownership in its flagship Molo graphite project, in the country.

Toronto-based Energizer bought the remaining 25% interest in the Molo project from joint venture (JV) partner Malagasy Minerals through a deal first announced in October last year.

The deal gives Energizer full ownership of the project and 100% interest in all the industrial mineral rights within the acquired property, which comprises 2 120 claims totalling 94 011 ha. The actual area of the Molo deposit, as currently delineated, comprises only about 1%, or 62 ha, of the total acquired land package.

Energizer’s total land package in southern Madagascar includes about 320 km of continuous graphitic trends, where all graphite mineralisation was immediately at surface. Drilling, trenching and geological mapping had also identified at least six other zones that could be potential standalone graphite deposits.

“The acquisition of the remainder of the Molo graphite project represents the achievement of another key milestone and is an important step in the company's overall mine development plan. We know through ongoing dialogue with potential strategic partners regarding offtake agreements and project financing for the future Molo mine that 100% ownership is highly preferred and so this transaction should certainly help facilitate those discussions,” Energizer CEO Richard Schler said.

Under terms of the deal, Energizer would pay C$400 000 in cash and issue 2.5-million common shares to Malagasy within five business days after the TSX had approved the deal.

Energizer would also issue 3.5-million purchase warrants valid for five years from the signing date of the deal, at a price to be determined by taking the volume-weighted average closing price of Energizer’s common shares during the five days immediately after executing the agreement.

Energizer would again pay C$700 000 and issue one-million common shares within five business days after receiving a final completed bankable feasibility study (BFS) for the Molo project, or announcing a formal decision to mine; and pay another C$1-million within 5 business days of starting commercial production at the mine.

Malagasy would retain a 1.5% net smelter return royalty on all output from the property.

As part of the purchase and sale agreement, Energizer had also acquired a 100% interest in the industrial mineral rights on about one-and-a-half additional claim blocks totalling an area of 10 800 ha immediately to the east and adjoining the Molo deposit claim blocks. The company acquired this additional ground to accommodate infrastructure build-out required for mine development.

In a parallel, but separate transaction, Malagasy acquired a 75% interest through a JV agreement to be drafted for nonindustrial minerals on its Green Giant property, with Energizer retaining the remaining 25% and Malagasy gaining a free carried interest through to the BFS stage.

Energizer would, however, continue to own a 100% interest in the industrial mineral rights, which includes the company's Canadian National Instrument 43-101-compliant vanadium resource estimate, comprising an indicated resource of 49.5-million tonnes at an average grade of 0.693% vanadium pentoxide (V₂O₅) and an inferred resource of 9.7-million tonnes at an average grade of 0.632% V₂O₅ at a cutoff of 0.5% V₂O₅.

The deal remained subject to approval by the TSX and the Securities Exchange Commission in the US.