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As graphite companies flock to flake graphite, Zenyatta Ventures is moving in another direction.
Averaging $1,530 per metric ton (MT) in 2012, flake graphite is one of the highest-value forms of the mineral, according to the US Geological Survey (USGS). However, despite that attractive quality, not all graphite hopefuls are interested in this type of graphite. Zenyatta Ventures (TSXV:ZEN), which is currently exploring and developing its Ontario-based Albany graphite deposit, is one such company.
Discovered during Zenyatta’s 2011 drill program, Albany is a vein-type breccia deposit that a company brochure describes as the only new magmatic hydrothermal graphite deposit currently being developed. Speaking to Industrial Minerals, CEO Aubrey Eveleigh elaborated further, explaining that the deposit is “volcanic in nature,” unlike flake graphite deposits, which are sedimentary, and noting that the material in the intrusion is “really pure” as the carbon hasn’t been significantly degassed.
The company believes that together, these characteristics make the graphite in the Albany deposit similar to the graphite found in Sri Lanka — a bold claim considering the graphite from that country fetches the highest prices in the world.
Reasons for confidence
Zenyatta, however, does not think its confidence is misplaced. That’s largely due to the results of a series of beneficiation tests conducted on samples from the Albany deposit. Released in February, the results show that “[t]rials using two different leaching processes both yielded results exceeding the target of >99.0% Carbon; specifically, one process yielded 99.7-percent carbon, while a cheaper process yielded 99.96-percent carbon, a purity that Zenyatta believes is “exceptional.”
That level of purity makes Zenyatta’s graphite not only rare, but also easy to process, the company’s brochure emphasizes. And those qualities make Albany graphite a product for which buyers will be willing to pay top dollar.
Market players are already taking note and appear to share Zenyatta’s high hopes for the discovery. In April, the Northwest Ontario Prospectors Association presented Zenyatta with the Bernie Schnieders, Discovery of the Year award for the Albany deposit. It was also named the top-performing company on the TSX Venture Exchange in 2012.
Competing with synthetic and flake graphite
Zenyatta’s February press release notes that the high purity of the graphite at Albany gives the company the “ability to produce a natural graphite product equivalent in purity to the highest-grade synthetic graphite.” Eveleigh emphasized that plan to Industrial Minerals, commenting that Zenyatta is “considering applications that are presently dominated by the really pure synthetic material.”
He also noted that the company feels that it will be able to compete with “high-purity, high-quality flake graphite.”
What about Sri Lanka?
One of Zenyatta’s key selling points is the fact that it is the only company outside Sri Lanka that is working towards producing vein graphite. Another is that Sri Lanka itself produces very little graphite — last year only 4,000 MT, according to the USGS.
However, as Graphite Investing News reported earlier this year, the latter may be set to change as a result of the Asian nation’s new plan to create tax incentives and a liberal regulatory framework in order to draw in more miners. While the area is not without challenges — among them, local partnership requirements — it appears that Zenyatta may soon be getting a little more company in the vein graphite arena.
What’s next?
After acquiring gaining full ownership of the Albany deposit in November 2012, Zenyatta is wasting little time in moving the project forward. The company is currently drilling at Albany and plans to continue doing so until August, at which time it hopes to be able to provide a NI 43-101 resource. It expects to have optimized its metallurgical testing by the end of the second quarter of this year, and will start its preliminary economic assessment in the third quarter, a company presentation states.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Related reading:
Types of Graphite: Amorphous, Flake and Vein
Is Flake Graphite the Place to Be in 2013?
Sri Lankan Graphite: A Major Opportunity Opens
What is Synthetic Graphite? Asbury Carbons’ Stephen Riddle Explains