Christopher Skidmore featured Energizer Resources (TSX:EGZ) on Beat the Market Stock Picks, reporting that the Company’s Green Giant project has purity, flake distribution, and tonnage that investors should pay close attention to, as well as its potential to be one of the lowest cost graphite mines.
As quoted in the article:
Now this is something I have tried to hammer home since I first wrote about Green Giant: this deposit is undeniably one of largest graphite deposits in the world, if not the biggest. Green Giant is so big, you can easily locate the telltale grey staining of the deposit on Google Maps and see the trends stretching the entire property for over three hundred kilometers at surface. Technically Syrah’s drilling over a billion tonnes of graphite ore in Mozambique makes them officially bigger; but with mineralization stretching for more than 120km and the deposit being defined for only 1km in strike length Green Giant has more ore on its property than Balama.
The $418/t cost estimate for Molo is just for start-up production. Management expects to be able to reduce these costs further by optimizing operations and using synergies with the nearby developing Sakoa Coal Fields. Currently, the Green Giant PEA is not optimized for mining, with initial plans including expensive containerized diesel as primary energy source. Synergies with Sakoa Coal Project could bring costs down close to $250 per tonne with the addition of power, heavy oil and paved roads to the project. The PEA was also done in South African Rand indicating further enhancements converting the PEA to the appreciating USD. Test shipments are being made to the Port of Soalara later this year from Sakoa, which means Green Giant will have access to the cost saving infrastructure sooner than later.
Another big factor is processing, currently at 80% of the cost of producing a concentrate. Energizer achieved better results from the PEA by applying a softer grind to the graphite. A simpler and less intense process could result in further processing cost savings than was initially indicated in the PEA released in February. The PEA was considered extremely conservative to start, but even if Energizer comes close to the targets in the PEA and then add further enhancements and synergies, Green Giant could be mined for $200 to $250 per tonne before they ship it to the coast.