Name of the Project
Molo graphite project.

Location
The deposit is situated 160 km south-east of Toliara, in the Tulear region of south-western Madagascar.

Client
Energizer Resources.

Project Description
The project has proven reserves of 14.17-million tonnes grading 7% graphitic carbon and probable reserves of 8.37-million tonnes grading 7.04% graphitic carbon.

A feasibility study completed on the project envisages a mine that will produce an average of 856 701 t/y of ore, which will be processed to produce an average of about 53 017 t/y of graphite concentrate over a 26-year life-of-mine.

The proposed development includes 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.

The mine will use four 2 MW diesel generators (three in operation and one on standby), with water supplied from a wellfield.

The processing plant will comprise conventional crushing, milling and flotation circuits followed by concentrate filtering, drying and screening. The waste heat generated by the power station will be used for the drying of the concentrate.

The tailings storage facility, consisting of a valley dam layout, is located about 1.5 km west of the process plant and is designed to accommodate the run-of-mine tonnage for the mine’s life.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated post-tax net present value, at a 10% discount rate, of $389.80-million and an internal rate of return 31.2%, with a 4.84 year payback.

Value
The project has an estimated capital cost of $149.90-million. The feasibility study assumes that the mine will be funded on a 50% debt and 50% equity basis.

Duration
Production is targeted to start in 2017.

Latest Developments
Energizer has reported progress on the Molo project after it announced in August that a Dundee affiliate had become the largest shareholder at just under 20%, enabling Energizer to initiate a front-end engineering design (Feed) study.

Goodman & Company Investment Counsel, one of Energizer’s largest institutional shareholders, has 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.

Sprott Asset Management and significant incumbent shareholders of the company represent the remaining investors.

The proceeds of this financing will be used in part to fund the completion of a Feed study for the project.

According to Energizer, a Feed study is conducted only in the advanced stages of mine development and is being initiated now to determine potential development path options that have been presented to the company by prospective strategic partners regarding offtake agreements. Energizer has noted that it will use portions of this investment to fund the development path that it determines to be most optimal.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Energizer Resources senior VP of corporate development Brent Nykoliation, tel +1 416 364 4911, fax +1 416 364 2753 or email info@energizerresources.com.