Energizer Resources: Molo BFS a Catalyst for Advancing Offtake Agreements

Energizer Resources (TSX:EGZ) released a bankable feasibility study (BFS) for its Madagascar-based Molo deposit at the beginning of February, and at PDAC, Resource Investing News had the chance to speak about it with Brent Nykoliation, the company’s senior vice president, corporate development.

Nykoliation said that one key takeaway for investors is that the BFS shows that Energizer has “very realistic and conservative economics around the project.” He added that the BFS is “one of the most robust … that have been put out for a graphite project.” Importantly, “Energizer has put out one of the lowest operating costs of [its] peers” and has “an operating cost of about $353 per tonne of concentrate,” which puts it “in the realm of the Chinese operating costs.”

He also touched on exactly what Energizer has at Molo in terms of graphite. “Energizer has a very high percentage of large and jumbo flake, which is your premium price,” he said, also noting, “about 80 percent of our project would qualify as medium, large and jumbo, which is exactly the size you need to produce anode material, ie. battery-grade graphite.”

Nykoliation was also able to answer some questions that investors might have about the BFS. For one thing, he explained the reason annual production at Molo has been reduced from 84,000 tonnes a year to 53,000. “We thought that even though [84,000 tonnes] is probably a desired level to have in the next couple of years given all the ability and the demand markets for electric vehicles and consumer electronics, we wanted to make sure we erred more on the conservative side. So 53,000 to us was a number that we thought would be more realistic to the market and yet still have the ability to go out there and provide enough graphite for what we believe and most people would agree is going to be a dynamic change in the demand growth for graphite,” he said.

Furthermore, he looked at how the BFS addresses the infrastructure situation in Madagascar and at where Energizer is now sitting in relation to its peers. “The BFS was the catalyst for us to get out and advance our discussions … in terms of our offtake potential and strategic partner meetings,” said Nykoliation. “This was a real catalyst for us now to be able to go out, advance these meetings and have real economics around the project.”

Watch the video below for more of his thoughts.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Energizer Resources is a client of the Investing News Network. This article is not paid-for content. 

Related reading:

PDAC 2015: Notes from the Floor

Energizer Reaches Milestone with Molo Deposit Feasibility Study