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More Flake Graphite Needed to Keep Pace With Surging Battery Demand

Posted by AGORACOM-JC at 7:32 AM on Tuesday, March 27th, 2012

Consumer appetite for electronic gadgets such as laptops, iPhones, cell phones, and MP3 players is fueling demand for lithium-ion batteries, which contain twenty times more graphite than lithium. In addition, mankind’s quest for cleaner vehicles – such as electric cars, which also require lithium-ion batteries – is increasing demand for graphite, a metal once seen as a staple for the steel industry.

Brent Nykoliation, Vice President of Business Development at Energizer Resources Inc.  (TSX:EGZ ,OTCBB:ENZR,FWB:YE5), said that electric vehicles, which are already being developed, hold one of the biggest and most immediate potential offtakes for graphite in the coming years. China, for example, is reportedly  preparing to stock up on enough graphite to put one million vehicles a year on the road starting in 2015. At an average of 130 pounds of graphite needed per electric car battery, the net requirement per year will be 300,000 tons of graphite.

“Now multiply that by five million cars and you see the demand potential,” Nykoliation told Graphite Investing News in an interview. “And that’s just China. Morgan Stanley predicts electric vehicles and hybrid electric vehicles to have a 25 percent penetration level globally by 2025 from just 0.1 percent today. While many would think this is an overly aggressive estimate, just taking a five percent penetration of the 850 million vehicles globally today equals more than 40 million vehicles by 2025. Industry analysts agree that the big producers making graphite are concerned because they are not prepared to meet that level of demand.”

Global demand for graphite is currently about 1.2 million tons a year, and most of that comes from the steel industry. In 2008, according to GeoMega  (TSXV:GMA ), a Montreal-based exploration company, graphite demand for lithium-ion batteries was approximately 44,000 tonnes, or about ten percent of the flake market.

“Currently batteries account for roughly five percent of global graphite demand,” Chris Berry, founder of House Mountain Partners , told Graphite Investing News in an interview. “However, demand for lithium-ion batteries for use in various applications is growing by 20 percent per year. As you need 20 times more graphite in a lithium-ion battery than you do lithium, it is clear that there is potentially strong demand for large-flake, high-purity graphite in the future.”

3,000 tons of graphite to start nuclear reactor

Energizer’s Nykoliation added that there are several new applications that are entirely reliant on graphite, such as pebble-bed nuclear reactors. A one gigawatt pebble-bed nuclear reactor needs about 3,000 tons of graphite to start and up to 1,000 tons a year to operate. “A lot is happening, and these developments are going to create a huge demand for graphite.” Energizer is fast-tracking its Green Giant  project in Madagascar, with plans to mine large-flake graphite in 2014. The Toronto-headquartered company is developing what it believes is one of the largest graphite deposits in the world.

Canaccord  (TSX:CF ) estimated in a recent research report that lithium carbonate demand from lithium-ion batteries will reach 286,000 tonnes by 2020, requiring a six-fold increase  in annual flake graphite production to cater to the production of so many batteries. Northern Graphite Corp.  (TSX:NGC ) said that only flake graphite, which can be upgraded to 99.9 percent purity, can be used to make the spherical or potato-shaped graphite used in lithium-ion batteries. “The process is expensive and wastes 70% of the feedstock flake graphite. As a result, spherical graphite currently sells for $4-6,000/tonne, or twice the price of high quality flake graphite.”

Ryan Fletcher , a director at Zimtu Capital Corp. (TSXV:ZC ,OTC Pink:ZTMUF,FWB:ZCT1), a Vancouver-based firm that invests in resource companies, told Mineweb  in a recent interview that the steel industry and other historic applications of graphite use amorphous graphite, but these new emerging technologies use flake graphite. “About 40 percent of that 1.2-Mt market is flake and 60 percent amorphous, so the flake graphite market is just over 400,000 tons per year. Some of the players in the industry anticipate that just one application alone, the lithium-ion battery, could use well over 1.6 Mt of flake graphite per year by 2020, which is more than threefold the entire current market. Even if the market doubles, that’s 800,000 tons of graphite per year by 2020. A large-scale producer puts out only about 20,000 to 40,000 tons per year, which means a lot of new mines and a lot of opportunity.”

House Mountain’s Berry said “there are dozens of companies involved in the lithium-ion battery business for both technology and storage.” LG Chem  and A123 Systems (NASDAQ:AONE ,FWB:ALC) are two companies involved in producing lithium-ion batteries.

Considering the fact that a large-scale producer’s upper end of graphite production is 40,000 tons of flake graphite per year, and that there is an estimated additional demand of one million tons by 2020, about 25 new mines are needed by that time. WithChina  controlling more than 70 percent of the globe’s graphite production and calling for rare earth-style quotas on its export, there will be a premium placed on graphite mines in countries that are seen as more stable and less prone to resource nationalism.

Energizer Resources Confirms Jumbo Flake Graphite With +90% Purity; DRA Mineral Projects Makes Initial Equity Investment in Energizer

Posted by AGORACOM-JC at 9:40 AM on Monday, March 26th, 2012

TORONTO, ONTARIO–(March 26, 2012) – Energizer Resources Inc. (TSX:EGZ)(OTCBB:ENZR)(FRANKFURT:YE5) (“Energizer” or the “Company”) is pleased to announce that it has received positive initial metallurgical test results from its Green Giant Project in Madagascar and that DRA Mineral Projects has made an equity investment into the Company.

Graphite ore samples from the Fotsy and Molo zones were submitted to the North Carolina State University (NCSU) Minerals Research Laboratory in Asheville, North Carolina for preliminary evaluations to define potential for recovery of commercial products. Simple mechanical crushing with no flotation yielded flake sizes of +50 mesh, which according to Tom Burkett, Vice President of Graphite Materials & Systems at SGL Carbon Group – the world’s largest carbon company – is regarded by the industry as jumbo flake. Both ores have produced graphite concentrates at purities of +90%.

Both samples were subjected to beneficiation that included crushing, grinding, and various flotation schemes. A +50-mesh grind was utilized for the majority of the testing to achieve a high degree of liberation while maintaining a particle size that would be attractive to the marketplace. This testing recovered graphite in the form of oversize products at +50 mesh and flotation concentrates.

Data is still being processed and an initial report will be forthcoming by the NCSU complete with conclusions, recommendations, flake distribution summary and a preliminary process flow sheet.

Green Giant Outlines Extensive Graphite Zones

Energizer’s Senior Vice President of Exploration, Craig Scherba, P. Geol., commented, “We are very pleased with these initial results. With the confirmation of jumbo flake graphite and +90% purity, Energizer has now met two more thresholds and when combined with our exploration results to date, make our Green Giant project quite unique in the marketplace. We have multiple zones with mineralization at surface, high grades, wide intersections and strike lengths that can be measured in kilometers, not meters. We are outlining a graphite camp.”

To date, Energizer’s Green Giant and JV Property contains 17 separate and distinct graphite zones, seven of which have been drill tested. The culmination of drilling, trenching, geophysics, geologic mapping and prospecting have confirmed graphite mineralization in all tested zones to be at surface, open along strike and at depth.

Drill assays have been received so far from two zones, the Fondrana and the Fotsy, showing high grades and extensive widths (FOND-01: 6.24% C over 118.6 meters; FOND-TH-11-01: 7.11%C over 106 meters; FOTSY-TH-11-05A: 9.93%C over 10 meters). Initial assay results are expected shortly from the Molo and Seta zones.

DRA Makes Initial Equity Investment in Energizer

The Company is also pleased to announce that a private placement transaction has been concluded with DRA Africa Pty Limited, a wholly owned subsidiary of DRA Mineral Projects (“DRA”) who has recently become a technical partner of Energizer (see January 25, 2012 news release).

Johann de Bruin, Pr.Eng, and Director of DRA commented, “Our current understanding of the quality of the graphite within the tenements as well as our understanding of the logistics associated with the development of a mine in the Southern part of Madagascar gives us enough confidence in the Green Giant Graphite and Vanadium project to justify moving forward with an equity investment in Energizer Resources. This represents a further commitment to the project and solidifies our relationship with Energizer since being appointed as their technical partner. It is our intention to increase our equity position as funds and test work analyses become available in accordance with the MOU. We look forward to supporting Energizer Resources in bringing this project to implementation and operation.”

Kirk McKinnon of Energizer stated, “We are very pleased that DRA has decided to invest in Energizer. It certainly reflects their belief in our project and further strengthens our relationship. Their role of technical partner is a key factor in our ability to move the project from resource definition to production within a very short timeframe. As the importance of graphite continues to manifest itself, speed to market will become increasingly important in order to maximize shareholder value.”

DRA has subscribed for 2,540,000 common shares of Energizer for gross proceeds of $635,000 USD. This results in DRA having an equity position of 1.6%. Under the terms of the Memorandum of Understanding (“MOU”), DRA has the right to acquire up to a 5% equity position in Energizer. Future private placements will be done at market conditions. The transaction requires final regulatory approval and all securities issued in this matter are subject to applicable hold periods.

About DRA Mineral Projects

  • DRA is a world leader in process engineering and metallurgy and has been a provider of full EPCM services (Engineering, Procurement and Construction Management) since 1984. DRA has a primary focus on managing the development of mining projects in the African Continent
  • Employ over 1,100 people with operating offices in Southern and Central Africa, Australia, India, China, Canada and the UK.
  • A well-qualified team of over 350 professional engineers and project management professionals specializing in large capital projects in the minerals processing fields of coal, vanadium, diamonds, gold, platinum, ferrous metals, base metals and heavy mineral sands
  • They are a leader and specialist in the field of outsourced operations and maintenance of minerals processing plants. They currently operate 22 mineral processing facilities in Africa and Indonesia

About Energizer Resources

Energizer Resources Inc. is a mineral exploration and development company based in Toronto, Canada, which is developing its Green Giant Project located in Madagascar. The Green Giant hosts one of the largest known vanadium deposits and potentially one of the largest known graphite deposits.

The identification of 17 graphite trends, with a cumulative strike length in excess of 320 km, on the 100% owned Green Giant property and 75% owned Joint Venture (with Malagasy Minerals Limited (ASX:MGY) properties, have validated the Company’s belief that the Green Giant Project has the potential to host a potential graphite camp. Metallurgical results to date confirm jumbo flake (+50 mesh) with +90% purity.

As graphite and vanadium are considered to be critical minerals, the Company will position itself to both strategic partners, and the financial markets, a dual offering of critical minerals from a single source for energy and storage, as well as steel and other innovations worthy of development.

In addition to the Toronto Stock Exchange (TSX:EGZ), the Company’s common shares trade on the U.S. Over-The-Counter Bulletin Board under the symbol ENZR, and on the Frankfurt Exchange under the symbol YE5.

For more information on graphite, graphene and vanadium, please visit our website at www.energizerresources.com.

We seek Safe Harbour: This press release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from expectations and projections set out herein.

Contact Information

 

Energizer Resources Inc.
Brent Nykoliation
Vice President of Business Development
Toll Free: 800.818.5442 or 416.364.4911
[email protected]

Energizer Resources Inc.
Kirk McKinnon
Chairman and CEO
Toll Free: 800.818.5442 or 416.364.4911
www.energizerresources.com