When it comes to ultra-high-purity graphite plays, few can touch Zenyatta Ventures Ltd. (TSXV: ZEN | OTCQX: ZENYF). Recently, I had the pleasure to have an in-depth conversation with the understated and unassuming Aubrey Eveleigh, Zenyatta’s President and CEO. From his offices in Thunder Bay, Ontario, Eveleigh spoke at length about Zenyatta — from the origins of the company, to where it’s at now, to the upcoming major milestones for the company.
When Eveleigh founded Zenyatta in late 2010, he thought he was creating a new nickel and copper exploration company. But when he went searching for these metals in an area northeast of Thunder Bay, he found something else. “There was no copper or nickel”, explains Eveleigh. “What we found was hundreds of metres of a unique and incredibly rare form of graphite.” Eveleigh and Cliffs Natural Resources (his partner in the project) had never seen this material in their life. They weren’t sure if they were sitting on something valuable or if they had just wasted their time. After testing a sample, Eveleigh got his answer. He had – completely by accident – stumbled upon on what could potentially be the most historic graphite find in over 100 years. “Zenyatta’s deposit really is a once-in-a-lifetime thing”.
Right now the company is using its venture-raised capital to drill holes in the Albany Project to determine its size. Drilling will be completed by the end of the month; however, Eveleigh has stated that there have been, “no unpleasant surprises; just the opposite, in fact.” The results for Zenyatta’s NI 43-101 Resource Estimate will be calculated in September and released in October. Then the company will complete its Preliminary Economic Assessment (PEA), which will be released near the end of the fourth quarter this year. The company is well funded and Eveleigh expects that Zenyatta will have between $4 and $5 million in the bank this time next year.
The quality and purity of Zenyatta’s deposit has been established, now Eveleigh and company are trying to determine the size of the deposit. That said, the deposit consists of two separate breccia pipes of mineralized graphite (Albany’s East and West Pipes). Eveleigh comments: “We have drilled on both of the pipes and they will be factored into the calculation when the Resource is announced.”
What separates Zenyatta from all of the other advanced-stage graphite projects in the world is that Zenyatta has a very rare hydrothermal volcanic type of graphite. A hydrothermal breccia pipe to be exact. All the other graphite is sedimentary or flake type graphite. What’s the difference? Zenyatta has very few impuruites in their deposit. That is why it is easily upgraded to 99.9% purity, using a cheap and fairly easy process of caustic bake (which is sodium hydroxide), without using acid and thermal treatment. That is why Zenyatta stands out; the unique graphite is so incredibly pure naturally, it only requires minimal processing to achieve the highest levels of purity.
Zenyatta has been the top performer on the TSX in both 2012 and 2013. Once people heard about the this one-of-a-kind find, they wanted in. The stock price climbed a staggering +455% in 2012 and has already seen +456% increase from it’s January 2, 2103 share price to yesterday’s market close (.87 cents to $3.98), off from its all-time high for the year of $5.00 per share (a +575% increase).
Graphite is used to make lithium-ion batteries; it’s also used in electronics, steel production, nuclear reactors and more. Conventional synthetic graphite is man-made – it’s created by cooking petroleum coke, a byproduct of refining oil. “It’s costly to make from scratch,” says Eveleigh, and that’s why he thinks his company has an edge. It cost nearly $6,000 a ton to make synthetic graphite. Zenyatta’s costs won’t be anywhere near that – nor will it harm the environment. While Zenyatta still has a long way to go before revenue starts, the company’s overwhelming stock-price performance proves, according to Eveleigh, “that there’s still money in the market, but you have to do something special.” And that’s just what Zenyatta is doing.
Note: Hydrothermal graphite is much more valuable than the typical variety found elsewhere. Normally, graphite comes in a lower purity, approximately 70% to 90%. The hydrothermal type of graphite is of a higher purity, greater than 95% and upwards of 99.9%
- largest hydrothermal graphite deposit being developed in the world
- metallurgical testing yielded ultra-high-grade purity carbon (99.99% purity)
- the company is targeting the $13 billion synthetic graphite market
- the company is named after the third album released by The Police in 1980, Zenyatta Mondatta (Eveleigh has the album framed on his office wall)
- When it comes to graphite pricing, it’s all about purity (Flake: $500-$2,000 per tonne vs. Synthetic: $8,500-$20,000 per tonne)