Energizer Resources Inc. (TSX: EGZ) (OTCQX: ENZR) (FWB: YE5) (“Energizer” or the “Company”) announces that it has finalized the purchase of the remaining 25% interest in the Molo Graphite Project from joint venture partner Malagasy Minerals Limited (“Malagasy”) (ASX: MGY).
With the transaction completed, Energizer not only acquires 100% of the flagship Molo Graphite Mine Project Area but also owns a 100% interest in and to all of the industrial mineral rights within the acquired property, which comprises 2,120 claims totaling 363 square miles. The actual area of the Molo deposit as currently delineated is approximately 0.3 square miles, representing less than 1% of the total acquired land package.
Richard Schler, Energizer’s Chief Executive Officer stated, “The acquisition of the remainder of the Molo Graphite Project represents the achievement of another key milestone and is an important step in the Company’s overall mine development plan. We know through ongoing dialogue with potential strategic partners regarding off-take agreements and project financing for the future Molo mine that 100% ownership is highly preferred and so this transaction should certainly help facilitate those discussions”.
Key Terms of the Purchase and Sale Agreement (“PSA”)
i) Within five days of TSX approval, Energizer will;
ii) On completion of a Full Feasibility Study (“FS”) Energizer will:
iii) On the commencement of commercial production Energizer will:
As part of the PSA finalization:
i) Energizer has also acquired a 100% interest in and to the industrial mineral rights on approximately 1.5 additional claim blocks totaling an area of 41.7 square miles immediately to the east and adjoining the Molo Graphite Deposit claim blocks. The Company acquired this additional ground to accommodate infrastructure build-out required for mine development.
ii) In a related but separate transaction, Malagasy has acquired a 75% interest for non-industrial minerals on four claims of Energizer’s 100%-owned Green Giant Property in Madagascar. Energizer will own the remaining 25% interest in non-industrial minerals and have a free carried interest through to the FS stage. Energizer will continue to own a 100% interest in the industrial mineral rights, which includes the Company’s NI 43-101 compliant vanadium resource estimate, comprising an indicated resource of 49.5 million tonnes at an average grade of 0.693% vanadium pentoxide (V2O5) and an inferred resource of 9.7 million tonnes at an average grade of 0.632% V2O5 at a cut-off of 0.5% V2O5.
The PSA, once completed, remains subject to Energizer obtaining final approval from the Toronto Stock Exchange and the Securities Exchange Commission in the United States. All securities issued in connection with this finalized transaction will be subject to a voluntary minimum hold period of one year, which is greater than the applicable regulatory Canadian and United States hold periods.
Craig Scherba, P.Geo.,President and COO is the qualified person for the technical information provided in this release.
About Energizer Resources
Energizer Resources is a mineral exploration and mine development company based in Toronto, Canada, that is developing its 100%-owned, flagship Molo Graphite Project in southern Madagascar.
The Molo Graphite Project is one of the largest known crystalline flake graphite deposits in the world. The Molo Project hosts a NI 43-101 compliant indicated mineral resource of 84.04 million tonnes grading 6.36% carbon (Cg) and an inferred resource grading 6.29% Cg of crystalline flake graphite.
The Company released a robust Preliminary Economic Assessment Study of the Molo in February 2013, resulting in a NPV at 10% discount of US$421 million, a 48% pre-tax IRR and a 3-year payback.
Energizer’s total land package in southern Madagascar encompasses approximately 320 kilometers (198 miles) of continuous graphitic trends, where all graphite mineralization is immediately at surface. In addition to the Molo, the Company has also identified through drilling, trenching and geological mapping at least six other zones that could be potential stand-alone graphite deposits.
Energizer has initiated a Full Feasibility Study, with results to be released to the market by Q4 2014. Results of the Company's recently completed pilot plant operation confirmed that 43.5% of the Molo deposit is classified as the premium-priced large and extra-large flake, with an average purity level in excess of 97% Cg achieved through standard flotation alone. The Company is targeting full-scale production by Q2 2016.
For more information on graphite, please visit our website at www.energizerresources.com or contact:
Brent Nykoliation, Senior Vice President, Corporate Development, +1.416.364.4911
or Craig Scherba, President and COO, email@example.com