Zenyatta Ventures Ltd

At PDAC 2015 in March, Aubrey told a group of us that graphene was interesting but that we were 10 years plus until there was enough demand to consider it a viable market for ZEN and that we would be gone by the time the graphene market would be real.

Around the same time, ZEN was proving up the markets that ZEN's graphite would be suitable for including

Lithium batteries on February 12th 2015: zenyatta.ca

Fuel Cells on March 9th 2015: zenyatta.ca

Powdered Metallurgy on May 19th: zenyatta.ca

These 3 news releases resulted in the following statement in the May 19th NR:

Zenyatta expects to have a targeted market application segmentation which includes 25-30% for high purity graphite in PM, 25-30% in Lithium-ion batteries and 20-25% for Fuel Cell products. The remaining 15-30% target applications will be discussed in upcoming news releases.

So the table was set for ZEN and their target markets...but then we got our first NR regarding graphene on September 24th: zenyatta.ca

Even with these great results for graphene, the company was not convinced about the market for graphene as per this statement in the NR:

It is important for Zenyatta to play an active role in R&D related to graphene research but at this point it will supply limited resources and Albany graphite samples to research facilities and receive results in return. We still believe that graphene requires technological development before the world sees large scale commercial viability but are delighted to play a prominent part in the advancement of a new innovative material.”

So the company, less than a year ago were not going to spend much time on graphene and did not see commercial viability any time soon.

Than we got a business development update on November 19th: zenyatta.ca

It included this statement:

This initial and further testing by potential customers is designed to qualify the Albany graphite material for the following applications: lithium ion batteries, fuel cells, powder metallurgy, nuclear and graphene.

So graphene was now part of the business development!

Then on January 27th, we got a further update on graphene: zenyatta.ca

I will let everyone read the accolades ZEN's graphite received for graphene but will draw attention to this paragraph:

Dr. Bharat Chahar, VP of Market Development for Zenyatta, stated, “The Company is excited with these results and is very pleased to learn that Dr. Chen and his research team have confirmed earlier test results from other academic institutions, like Ben-Gurion University in Israel, and continue to show that Zenyatta’s Albany graphite is an ideal source material for graphene production (see News Release dated 24 September 2015). The Company is convinced of the importance of this new and superior material (graphene) and is confident that the amount invested globally on R&D by large corporations and academics will result in eventual commercialization at a large scale. It is important for Zenyatta to play an active role in R&D related to graphene research, by providing Albany graphite test samples to research facilities. While we are optimistic about the potential of graphene in large scale commercial usage, we also believe that graphene requires much technological development before realizing this potential. Additionally, the graphene sector will require advancement in the area of mass production and we are uncertain of the total global demand for this nano-material at this time.”

Now, that is quite a change of tone from the NR 4 months earlier but let's keep going!

On May 11th we got news of ZEN being part of the Ontario trade mission to Israel: zenyatta.ca

Draw your attention to this comment:

Zenyatta will continue to build on the collaboration and successful results received from testing completed at Ben-Gurion University of the Negev (“BGU”) on the Company’s Albany graphite deposit located in Northern Ontario. BGU has identified properties of Zenyatta’s unique graphite that show exceptional attributes for use in multiple graphene applications.



Then, 5 days later, we got this NR: zenyatta.ca

Zenyatta Ventures Ltd. (“Zenyatta” or “Company”) (TSXV: ZEN) is pleased to announce the signing of a Memorandum of Understanding (‘MOU’) with Larisplast Ltd. (‘Larisplast’), Ben-Gurion University of the Negev (‘BGU’) & B.G. Negev Technologies (‘BGN’) while on the Ontario Business Mission to the Middle East.

and from the same NR:

Dr. Oren Regev, Professor, Department of Chemical Engineering at BGU, stated “Zenyatta’s purified graphite material was converted to nano-graphite and tested by our R&D team as an additive in construction material. BGU regularly uses various types of commercially available graphite but found Zenyatta’s Albany graphite to separate into layers much easier and with higher yields of graphene nano-particles than any other natural graphite types that we have tried. Producing an enhanced mechanical concrete product but with lesser amounts holds great promise against natural or man-made disasters and can be a significant reducer of pollution. To the best of our knowledge this will be the first nano-modified concrete product of this kind.”

Then on June 9th, we got this NR: zenyatta.ca

“CIIRDF is pleased to support Zenyatta, Larisplast, Ben-Gurion University and B.G. Negev Technologies as they collaborate on the development of an enhanced concrete with broad application across the construction industry,”

So in 9 short months, we went from not wanting to contribute too much to graphene to signing the first MOU of the company in a commodity that dwarfs all other commodities.

The PEA showed us a value of $7,500 per ton of ZEN graphite. The market for graphene has yet to produce on large commercial scale but the value per ton seems to be in the $50k per ton. It is easy to understand why ZEN would put their other market development to the side and concentrate on graphene.

This development took the company by surprise IMO. They had an established market development plan but looking at the potential value per ton and the potential size of the enhanced concrete market and other graphene applications, it is easy to understand why the company put everything else on hold and changed direction. The long agonizing wait of the last year is going to pay us shareholders in spades IMO.

The PEA showed an NPV of $600M USD at 30k tons mined per year and $7,500 per ton.

What is the NPV of the PFS going to show now with these new variables?

Holding ZEN has been tough, no doubt about it, we have all been through tough times holding this stock. Our psyche has been beaten down to believe that every bump up in the share price is followed by a bigger bump down in the share price. I believe we are close to having ZEN break out, especially with the risk markets being good again. For the first time in a long time, buy and hold may be the winning strategy with ZEN.

Sorry for the very long post but I hope you all found it worth the time. Rereading the last year of news releases for me certainly was!

Glorieux