Energizer Resources (TSE:EGZ) announced Monday further stand-out results from the Toronto-based miner's flagship Molo flake graphite deposit in Madagascar, with ongoing metallurgical optimization tests showing the larger graphite flake sizes that command premium selling prices.
The latest results from the Phase 1 Molo process optimization testing at SGS Canada Inc. have yielded results far superior to the graphite flake size distributions reported in February's Preliminary Economic Assessment (PEA) Study.
In a segment of the industry that adheres to the general rule that the larger the flake size and the higher the purity, the higher the selling price, the results are compelling.
The results of the open circuit cleaner test using an optimized cleaning circuit include the news that 47.6 per cent of the concentrate mass is large and jumbo flake graphite (that is, greater than +80 mesh) at a grade of 96.8 per cent C(t); 21.7 per cent of the concentrate mass is jumbo flake graphite (greater than +48 mesh) at a grade of 97.4 per cent C(t); while 23.5 per cent of is medium flake graphite (-80 to +150 mesh) at a grade of 95.6 per cent, while the remaining 28.9 per cent of the concentrate is small flake (-150 mesh) at a grade of 95.7 per cent C(t).
These results outstrip those recorded in the PEA study, returning a 44 per cent increase in graphite flakes larger than +100 mesh than in the earlier study and a grade improved to 96.3 per cent C(t) from 94.9 per cent C(t).
"These results are very significant because premium prices for graphite are achieved with the highest purity and flake sizes, and Energizer has just achieved marked increases in both," said President and COO, Craig Scherba.
"Based on these excellent results, Energizer anticipates that there will be a significant enhancement to the already positive economics of the project presented in our PEA Study."
Energizer late last year unveiled an NI 43-101 resource estimate for Molo, which ranks the deposit as one of the largest in the world.
The deposit located near Fotadrevo in the southern region of Madagascar is held 100 per cent within the joint venture entity with Malagasy Minerals Limited. Energizer has a 75 per cent ownership interest and is the operator of the Project.
Flake graphite from the property is high in both purity and quality, a confluence of characteristics that enables the miner to produce a high purity natural flake graphite product using low-cost, standard processing techniques thus allowing the miner to target all markets utilizing value-added graphite applications. Only natural flake graphite has all the necessary attributes and material properties that allow for use across all end-use applications, making flake graphite the most desired form of natural graphite. The material has applications across refractories, battery and energy storage, and specialty foils essential as a heat sink and sealant in portable electronics, smartphones, flat panel televisions and computer monitors.
The news comes a matter of weeks after stock prices almost doubled for the miner, spiking 87 per cent on the TSX after Energizer reported greater than 99.9 per cent graphitic carbon from a finished concentrate of the same flake graphite deposit.
Indicated resources at the Molo deposit total 83.99 million tonnes, grading 6.36 per cent carbon (NYSE:C), above a 2 per cent C cut-off grade, with inferred resources totalling 40.32 million tonnes grading 6.3 per cent C.
The conventional open pit project is expected to mine 1.17 million tonnes per year of ore, at an average head grade of 8.5 per cent with a stripping ratio of 1.65. With completion of the full feasibility study targeted for the fourth quarter of this year, the start of mine construction is expected in the third quarter of 2014, and production is anticipated in the fourth quarter of 2015 at an output capacity of 84,000 tonnes per annum.
Shares in the company were trading up the trading day before the news on the Toronto Stock Exchange, adding 0.015 of a cent at close, an increase of more than 6 per cent.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.