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Energizer Resources shares climb after confirmation of greater than 99.9% graphite purity
Thursday, November 07, 2013 by
Deborah Bacal
()(OTCQX:ENZR) shares jumped over 16% in early deals Wednesday after the company confirmed ultra-high purity graphite at its Molo project in Madagascar, of greater than 99.9% carbon using advanced chemical analysis methods.
The company used glow discharge mass spectrometry (GDMS) analysis on purified graphite concentrate from the property, one of the most advanced methods available to analyze purity levels of a large number of elements for commerical purposes.
The aim of the test was to quantify concentrations of impurities remaining in the purified graphite concentrate, and to provide analytical results with lower relative errors than with conventional analytical methods such as combustion infrared detection, Energizer said.
According to the company's statement released Wednesday, Energizer is one of only two companies in the graphite space that has used this high standard of assay testing on its finished concentrate to verify an ultra-high purity result, which was first announced in July on the back of a series of preliminary metallurgical tests.
"We are pleased to reconfirm that our Molo graphite can achieve an ultra-high purity of greater than 99.9% carbon under the most stringent of testing protocols," said president and COO, Craig Scherba.
"Energizer will use these results to facilitate the advancement of agreements with potential off take partners," he added, with the company currently in discussions, on track to place several tonnes of finished graphite in prospective partners' hands by the end of this month.
The company has been moving at lightning speed to bring to production its Molo deposit in Madagascar, a project that is considered to be one of the largest graphite assets in the world.
In the short span of one week in October, the graphite development company announced three significant milestones that move it along considerably in the process of achieving its end goal. Energizer unveiled the start up of its pilot plant operations, signed a preliminary deal with Cat Financial for potential project financing and acquired 100% ownership of the project.
The metallurgical results today using the advanced chemical method puts the company even one step closer to production. Energizer said tests of this nature are of particular importance to graphite manufacturers and producers, as it provides them with the ability to "quantify impurities at trace concentrations in high-purity advanced inorganic solids and to quantify concentrations of over 70 major elements in a single analysis."
The test conditions employed in the purification process eliminated any residual carbonate carbon or organic carbon that may have remained on the graphite flakes after flotation.
The Molo deposit is located strategically in the centre of the key graphite demand markets, which include China, India, South Korea and Japan, and has immediately serviceable infrastructure. The maiden resource on the property is made up of 84 million indicated tonnes at 6.36% carbon (C) and 40.3 million inferred tonnes at 6.29% C, and it is all-flaked -- the most actively pursued type and associated with the top three markets of refractories, batteries and consumer electronics.
A preliminary economic report on the asset estimated a pre-tax net present value of $421 million at a discount rate of 10%, with a 48% internal rate of return. Capital costs were pegged at $162 million, with a three-year payback period.
Shares of Energizer reached a high of 19 Canadian cents this morning, and was lately trading at 18 cents - up more than 16%.