The potentialBattery Grade V2O5
Current price of battery grade: $13 - $30 /lb
Current price of battery electrolyte: $25 - $40 /lb
Energizer's potential is excellent when both the battery grade V2O5 and large flake graphite are converted to NI-43-101 Proven and Probable Reserves for the start of commercial production scheduled for the end of 2014.
With the initial NI-43-101 compliant Indicated Resource of 49.5 million tonne of battery grade V2O5 grading 0.693% with recoveries at 82% being converted to 30 million tonne of NI-43-101 Proven and Probable Reserves of similar grade and recoveries, they would last over 10 years, at a production rate of 7,500 tonne per day (TPD). With battery grade V2O5 selling at the average price of $21.50/lb, sales would be $737.34 million annually for each year over the 10 year time frame. In addition, the existing large V2O5 resource potential would be converted to additional reserves.
Annual V2O5 Sales = 2,204.6 x 0.00693 x 0.82 x 7,500 x 365 x $21.5 = $737.34 million
Large Flake Graphite
Current price of Large Flake (94 – 97%): $2,000 - $2,500/tonne
Current price of Large Flake (99.9%): $20,000 - $40,000/tonne
Although the present large flake graphite camp is not yet NI-43-101 compliant, its size and grade indicates that the numerous trends will be converted to NI-43-101 compliant Proven and Probable Reserves.
With an additional 30 million tonne of NI-43-101 compliant Proven and Probable Large Flake Graphite (C) grading 7% with recoveries at 90%, producing at 7,500 TPD over 10 years, Energizer would on an annual basis, with (C) prices at $2,250/tonne have sales of a minimum of 75% of $388.04 million, or $291.03 million annually - based on the JV - , each year over a 10 year time frame,
Annual Graphite Sales = 7500 x 365 x 0.07 x 0.90 x $2,250 x 0.75 = $291.03 million
Potential sales from separate V2O5 and Graphite Operations, each at 7,500 TPD would be $1.028 billion annually, based on 30 million tonne NI-43-101 proven and probable reserves of each mineral.
Energizer might also consider producing both battery electrolyte and Large Flake (99.9%) on site and market them directly to users.