VANCOUVER (miningweekly.com) – There is progress at Energizer Resources’ Molo project after the company announced last week that a Dundee Global Investment Management affiliate had become the largest shareholder at just under 20%, enabling Energizer to initiate a front end engineering design (FEED) study.
The affiliate, Goodman & Company, Investment Counsel, one of Energizer’s largest institutional shareholders, on Thursday further increased its holding in the company by investing C$6-million of the total C$6.72-million in proceeds Energizer raised in a nonbrokered private placement financing.
“This now makes the Dundee affiliate Energizer’s largest shareholder at just under 20% and demonstrates the confidence that they have in our ability to bring our Molo graphite project into production,” Energizer senior VP corporate development Brent Nykoliation said in a statement.
Sprott Asset Management and significant incumbent shareholders of the company represented the remaining investors.
Energizer advised that the proceeds of this financing will be used in part to fund the completion of a FEED study for the company’s Molo graphite project, in Madagascar.
According to Energizer, a FEED study is only conducted in the advanced stages of mine development and is being initiated now in order to determine potential development path options that have been presented to the company by prospective strategic partners surrounding offtake agreements. Energizer noted that it will use portions of this investment to fund the development path that it determines to be most optimal.
During July, energizer had appointed UK-based HCF International Advisers as its adviser in negotiating and structuring strategic partnerships, offtake agreements and debt financing for its Molo project.
PROJECT PARAMETERS
The positive results of a February 2015 feasibility study (FS) on the Molo graphite project have confirmed that the project will be economically viable.
The FS had placed an after-tax net present value, when applying a 10% discount rate, of $389.8-million on its 100%-owned project, while the internal rate of return was calculated at 31.2%.
Prepared by independent consulting engineering firm DRA Projects, the FS considered a mine that would produce an average of 856 701 t/y of ore, which would be processed to produce an average of about 53 017 t/y of graphite concentrate starting in 2017, over the 26-year life-of-mine (LoM).
The study also assumed that the $188.2-million mine would be funded on a 50% debt and 50% equity basis. Steady-state costs were expected in the third operational year onwards, with the difference being in additional expatriates on site during the first two years.
The Molo project had National Instrument 43-101-compliant proven reserves of 14.17-million tonnes, grading 7% graphitic carbon, and 8.37-million tonnes, grading 7.04% carbon, in the probable reserve category.
The project had measured resources of 23.62-million tonnes, grading 6.32% carbon, and 76.75-million tonnes, grading 6.25%, in the indicated category.
The Molo project would include the construction of an openpit mine, a processing plant with a capacity of 862 000 t/y of ore and all supporting infrastructure including water, fuel, power, tailings, buildings and permanent accommodation.