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Energizer Resources Inc. (TSX:EGZ,OTCBB:ENZR) reported recent activities and milestones: the NI 43-101 technical report for the Molo Graphite Project entitled, “Energizer Resources Inc. Announces Positive Results of its Feasibility Study” has been filed on SEDAR; an application for the environmental permit has been submitted to the government of Madagascar and has been accepted; a FS Optimization Study is also underway with Energizer initiating portions of a detailed engineering review.
As quoted in the press release:
Filing of Molo Project Feasibility Study Technical Report
Further to the Company’s news release of February 5, 2015, titled, Energizer Resources Inc. Announces Positive Results of its Feasibility Study, the full Molo Graphite Project NI 43-101 technical report relating to the Company’s Feasibility Study (“FS”) has been filed on SEDAR. The report is also accessible on Energizer’s website at www.energizerresources.com under ‘Investors’, then ‘Technical reports’.
With the FS report available, the Company is now able to move forward on three key fronts.
Mining Permit: The application for the environmental permit has been submitted and accepted by the Madagascar government, which is the catalyst for the application of the mining permit as the environmental and mining permit approval process run concurrently. The Company’s expectation is to have the mining permit in place by the fourth quarter of 2015.
Off-take & Strategic Partners: Discussions with potential strategic partners concerning both project financing and off take agreements can now be significantly advanced, as several interested parties who have entered into Confidentially Agreements with Energizer have informed the Company that the delivery of the FS report is a mandatory requirement in their process of negotiating a binding agreement.
The Company can now actively begin engaging both the debt and equity financing channels as part of the capital raise process for mine development. The delivery of the FS was also a mandatory requirement for the project “debt” providers to even consider a financing initiative.
Battery-Grade Samples
To date, the Company has received only 100%-positive feedback from the companies evaluating the quality of the Molo graphite concentrate for anode use. This validates that the concentrate is of very high quality based upon independent end-user analyses. The pilot plant-produced samples analyzed to date have been of varying quantities and the Company believes it is an accurate representation of the graphite concentrate that would be produced at the Molo Graphite Project.
In February of this year, the Company had a large quantity of graphite concentrate upgraded to battery-grade purity of 99.975% carbon (C). This purified concentrate was then shipped to potential off-takers in Asia, North America and Europe who had requested purified samples as part of their on-going evaluation process for the use of Molo concentrate in battery applications. Many of these evaluating parties also spherically cut the purified Molo concentrate to meet their product specifications. On the heels of this latest round of advanced product testing, the Company plans to conduct follow up visits with several end users and looks forward to reporting test results as they become available.
FS Optimization Study Underway
The Company was pleased to report in its news release of February 5, 2015 the positive results of its FS, confirming that the Molo project is economically viable with a planned mine design that the Company believes is both conservative and realistic. The FS indicated robust project economics and in particular, an operating cost (ex-mine) of US$352/tonne, which positions Energizer in the lowest cost quartile of graphite producers.
Further, the Company believes that there may be opportunities to reduce both the operating expenditures (“OpEx”) and capital expenditures (“CapEx”) of the project. In an effort to quantify these potential reductions, the Company has initiated portions of a detailed engineering review to further optimize the FS.
Some of the key aspects of the optimization study will include the following:
i) The engagement of two engineering consultants to review the design and construction plan anticipated in the current FS model.
As part of this review, the Company will consider other execution strategies such as constructing a large percentage of the mine processing facility off site, which would then be disassembled, shipped and reassembled on site in a “plug and play” type scenario. The Company believes that the potential benefits for this type of build plan could be lower CapEx costs, shorter construction timelines to production and improved management and quality of build process to help ensure the project would be remain on budget and on time.
ii) Issuing of requests for proposal regarding a possible renewable energy solution for the Molo site.
Based on preliminary discussions and feedback from several energy storage system solution providers, this could provide an overall reduction in energy costs, which would then translate into further OpEx savings as compared to what has been modeled in the FS. An option being investigated is a 5 to 8 megawatt solar PV/diesel hybrid off-grid power facility that may be able to reduce project power costs, which are calculated on 100% diesel generation in the current FS. An international environmental agency is currently in Madagascar conducting a comprehensive analysis of the country’s wind and solar characteristics. The agency has begun mapping the entire island to record wind and solar data, with the Molo site being fast-tracked in the process and will be mapped over the next two weeks.
The climate and geographical location of the Molo Graphite Project provides an ideal setting for a renewable energy power solution and could minimize the effect of possible escalating costs of diesel in relation to ongoing power needs at site. A solar and/or wind powered option is very appealing to Energizer, whose corporate environmental goals are to operate as “clean and green” as possible and to minimize the carbon footprint of the project. This may also provide us with the opportunity to participate in the trade of international carbon credit units.
Click here to read the Energizer Resources Inc. (TSX:EGZ,OTCBB:ENZR) press release
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