Shares in Energizer Resources (TSE:EGZ)(OCTBB:ENZR) rallied today after the graphite explorer confirmed that its preliminary economic assessment (PEA) for its Molo graphite deposit in Madagascar is on track for next month.
The company has also hired GMP Securities as a financial advisor to help in advancing the project to its next stage of development, also known as the bankable feasibility study.
This news follows Energizer's unveiling late last year of an NI 43-101 resource estimate for its giant Molo graphite deposit, part of its aptly-named Green giant project.
"With a NI 43-101 resource estimate in hand, followed shortly with the results of our PEA, we are now fast-tracking to the BFS," said president and COO, Craig Scherba.
"We are pleased to have GMP assisting us in this important next step in our project's development. This partnership will further increase the exposure of our Molo graphite project to potential investors in Europe and other key investor markets."
Indicated resources at the Molo deposit total 84.04 million tonnes, grading 6.36% carbon (NYSE:C), above a 2% C cut-off grade, with inferred resources totalling 40.34 million tonnes grading 6.29% C.
Mineralized zones in the resource estimation start from the surface and continue to a maximum depth of 385 metres, and remain open for expansion along strike and at depth.
Two high grade zones occur on the western and eastern flanks of Molo, with a combined total indicated resource of 60.17 million tonnes grading 8.1% C, above a 4% C cut-off grade.
The next milestone for the company is the release of the preliminary economics report, expected in February, which will outline the capital and operating expenses for the graphite mine.
DRA Mineral Projects, which has built more than 200 mines and has taken a 1.6 per cent equity investment in Energizer through a strategic partnership, is leading the delivery of the soon-to-be-released PEA report.
This next step is expected to provide the company with the platform to establish its necessary strategic alliances for project financing, graphite off-take agreements, and marketing of Energizer.
Discussions with potential partners continue, the graphite explorer said Thursday, and the company expects to provide updates on this subject in the near future, with GMP assisting in the process of securing financing.
The Molo deposit is located strategically in the centre of the key graphite demand markets, which include China, India, South Korea and Japan.
The company has wasted no time in developing what it calls a "world class" graphite resource, having first identified graphite as a potential mineral of interest on the Green Giant property in December 2011.
Graphite is a mineral form of the element Carbon (C), and forms in veins inside metamorphic rocks as a soft black material. It has many applications today, ranging from refractories, brake linings and steel-making uses, to lithium-ion batteries and fuel cells. Demand for the industrial mineral is projected to grow as lithium-ion battery adoption continues.
Indeed, companies like Energizer are taking advantage of what is perceived as a huge potential for graphite demand.
Metallurgical tests confirm that the company's Molo deposit is 100% flake, including jumbo and large flake at an average grade of 93% C.
Flake graphite - the most actively pursued type and associated with next-generation technologies - is made up of layers of graphene, which is the minerals' base structural element.
The deposit, which boasts immediately serviceable infrastructure, is also in close proximity to specialty finishing battery producers in both Korea and Japan, where most producers send their spherical graphite for specialty coating.
Shares in Energizer rose 3 cents or over 10% to 32 cents on Thursday afternoon.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.