Name and Location
Green Giant Molo graphite project, Madagascar.

Client
Energizer Resources.

Project Description
Energizer reported a new mineral resource for the Molo deposit in August 2014, consisting of a measured resource of 23.62-million tonnes grading 6.32% carbon, an indicated resource of 76.75-million tonnes grading 6.25% carbon and an inferred resource of 40.91-million tonnes at 5.78% carbon, for a combined total of 141.28-million at 6.13% carbon.

A preliminary economic assessment (PEA) on the project envisages a conventional openpit mining method using trucks and loaders, with a capacity of 1.17-million tonnes a year of ore at 92% availability, with an average head grade of 8.5%.

The processing will entail three-stage crushing, followed by a primary milling and flotation separation circuit. The resultant flake graphite concentrate will be thickened, dried, separated into various flake sizes, packaged and stored before shipment. The final residue generated by the flotation process will generate a clean, nonacidic tailing. The concentrate production is estimated at an average of 84 000 t/y of graphite concentrate, with an average specification of 92%.

Net Present Value/Internal Rate of Return
The PEA estimates a pretax net present value, at a discounted rate of 10%, of $421.46-million and a pretax internal rate of return of 48%, with a payback of three years.

Value
The estimated capital cost for the project is $162.04-million.

Duration
Production is slated for 2015.

Latest Developments
Two independent third parties have successfully manufactured spherical graphite from Energizer’s Molo flake graphite concentrate, with initial test results indicating that it has met all specifications and quality requirements for battery anode material production.

Based on these results, both parties have confirmed that Energizer now qualifies to move to the next stage in product analysis, which will include further bulk-sample testing stages down each of the company's respective customer supply chains.

Energizer is negotiating expected timelines and logistics regarding these additional stages with each party, including discussions on potential offtake agreements.

The purpose of these tests is to determine the potential for the Madagascar-based deposit to be an alternative and sustainable natural source of spherical graphite concentrate for the purpose of supplying battery anode material for the burgeoning electric vehicle (EV) market.

Without disclosing which companies have conducted the tests, Energizer has noted that they include a prominent Japanese manufacturer of battery anode material and a top European supplier of spherical graphite for EVs.

Testing in both instances comprises two separate 20 kg samples of Molo concentrate, ranging from -200 mesh (small and fine flake) to +32 mesh (extra large and jumbo flake), being purified with standard methods and spherically cut to specifications for lithium-ion batteries used by a significant automotive brand.

The testers have confirmed that the Molo concentrate shows “very good” potential compared with their respective current suppliers.

The global graphite market is heating up in the wake of increased technological applications for the carbon allotrope, including US automobile maker Tesla’s construction of its upcoming GigaFactory battery plant, in Nevada, which is expected to double world graphite demand by 2022.

Key Contracts and Suppliers
Not stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Energizer Resources senior VP of corporate development Brent Nykoliation, tel +1 416 364 4911, fax +1 416 364 2753 or email info@energizerresources.com.