I would not concern myself with how much ZEN is up already. There is only one other mine in the world and that is in Sri Lanka. The veins there are centimeters wide. So we will be the largest Vein Graphite property in the world when done. We think they have about 10,000,000 tonnes at 5% now and have just begun drilling. We think this pipe (they have 3 on the property) will hold in excess of 40,000,000 tonnes at 5% when done. It is the purest graphite on the planet at the moment. Refining is very easy and very low cost. I am using $2K but am being told it is way way below that. However, to be safe still using $2K for costs.
At one point the 99.9%+ stuff was selling for as much as $30K a ton. It supposedly is now selling for $20K we are using $7K to $10K in our calculations.
Very little of the Flake Graphite developed to high purity (spherical graphite) will impinge on the synthetic market, so the more graphite that ZEN finds the more they take over from the Synthetic production putting synthetic producers out of business. To give you an example. For a synthetic producer to produce 99.95% costs him over $15K. For ZEN it will cost less then $2K.
At the moment there is demand for 1.5million tons per year of synthetic. Most of that is down at the 99.0% level and sell for far less. (about the $7K I am using for our 99.96% stuff)
If you start using real numbers the upside is somewhat unbelievable. If we can get 40,000,000 at 5% and that is all, then that's a 20 year mine life at 100K tons per year. So this is all doable. If by that time we are at 100,000,000 shares FD then share price is ridiculous. Just using 100K tons per year, you get share price numbers in the double digits, without a problem and that is using the very smallest of figures without giving them credit for any of the high flying prices.
I would compare this stock to ARU of years gone by. It has that kind of potential and to be honest I think anyone ignoring it here, is ignoring it at their peril. I always suggest loading up in 1/3 loads. Get a position, then if it falls , add.
Their is a dead period here, but fortunately for holders, that period will finally get the word out. We were all lumped in with the other flake graphite companies and no one understood the difference between the two.
They are beginning to understand now. Fully diluted there are 57,000,000 shares out. of that almost 11million are warrants exercisable at a $1.00. Those people are either shorting the stock now to lock in a 40% return or are exercising with intent to keep.
That means the company will have about $13million in the bank with 57,000,000 FD.
No need for a PP, that will easily take us through the drilling season, to 43-101 and a PEA.
So right now the company has a market cap of less then $100,000,000 which with this kind of spec, is very very low. We think the stock deserves a $250,000,000 market cap, however, things have changed somewhat since the days of the Saskatchewan Coal comfort letters so have moderated our expectations. At $2.50 its still cheap in our impression and if things go as they should you will be looking at double digits based on what we know now. However we are moving in baby steps. The target is based on solid info, so I can easily justify the target to anyone that challenges it. I am using the following;
1) excessive costs to refine
2) The lowest sale price of inferior purity synthetic
3) The lowest predictions for tonnage
4) middle of the road expectations on production
And, it still works out to double digit share price in the end.
Disclosure: I am long OTCQX:ZENYF.
Additional disclosure: I am actually long ZEN-Vancouver Exchange