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VIDEO: Zenyatta Ventures Ltd (CVE:ZEN) Rebranding as Zen Graphene Solutions

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Zenyatta Ventures Ltd (CVE:ZEN) (OTCMKTS:ZENYF) (FRA:ZAY) CEO Dr. Francis Dubé shares the company’s plans to take a large bulk graphene sample this winter. Dubé explains that the Albany graphite site has deposits that are high-grade and unlike any other flake graphite in the world. Zenyatta’s supply of high-end graphene positions the company to profit from both a lack of similar product on the market and the current soaring price of graphene. Zenyatta is redoing its PEA on the strength of increasing recovery from 75 to 90 percent, less reagent costs, and studying the potential of a smaller-scale underground operation. Dubé explains that as a result of the company’s management restructuring in the spring, the companying has been reborn and will be rebranding as Zen Graphene Solutions.

Transcript

James West:   Francis, so tell me about all these great things that are happening in Zenyatta. I understand there’s a name change, you got a different direction going, you sort of –

Ed Milewski:  This is a world-class deposit, too. This is a very unique –

Francis Dubé: It is. We got decades worth of, you know, product in the ground –

James West:   Just decades?

Francis Dubé: At least.

Ed Milewski:  No, I remember going to the presentation years ago, and this fellow was there, and I met him years ago, like 20 years –

James West:   This fellow?

Ed Milewski:  No, no, no. the guy I was trying to remember from TD. Anyway, he said to me –

James West:   Craig? Sorry, keep going.

Ed Milewski:  He said this was one of the great deposits of this kind in the world, and there was a geological event.

Francis Dubé: Dr. Conley, might be one of the guys who’s been a researcher working with us from the beginning.

Ed Milewski:  Eventually, it’s like, it’s like someone’s going to take this out.

James West:   Put it into production.

Ed Milewski:  Do something with it.

James West:   Drill holes in it.

Ed Milewski:  It’s too big a deposit.

Francis Dubé: So our goal right now, one of our goals is to actually take a very large bulk sample. We’ve applied for 990 tonnes; if you cross the line of 1,000 tonnes, then you actually fall under mining, and a lot of things come with that, so we’re trying to avoid that. But yeah, our goal and, you know, we’re trying to get this done with a winter road, keep it economic, and do that from January to March, April this year.

Ed Milewski:  Does it apply with all commodities, the thousand-tonne rule?

Francis Dubé: Yeah, anytime you’re going to do a bulk sample, that’s the Mining Act, so yeah, that applies across the board.

Ed Milewski:  So is that a daily thing?

Francis Dubé: No, that’s a once a project lifetime, basically. If you do it a second time, then you’re into mining; you need a, you know, an EDA, you need a –

James West:   What kind of grades are we talking, here?

Francis Dubé: We have two pipes. East pipe’s a much higher pipe; we’re probably about 4.5 to 5 percent there, and about 2.5 percent on the West pipe.

James West:   Okay, so this is a vein hosted deposit?

Francis Dubé: It’s not – we call it vein graphite, that’s a nomenclature from Sri Lanka. This is really a volcanic deposit, fluid-derived graphite. There’s nothing on Earth like it. It’s created, it was –

Ed Milewski:  Are you a geo?

Francis Dubé: I’m not, I’ve just been around geos enough for a very long time.

Ed Milewski:  But you’re a doctor?

Francis Dubé: Yeah, optometrist. So, nothing to do with this business.

Ed Milewski:  You know what? I got astigmatism – no. James –

James West:   You’ve got an eyeball in there.

Ed Milewski:  I think we should have a little session here.

James West:   An optometry session?

Ed Milewski:  Yeah, you know what? Two birds with one stone, that’s what I say.

James West:   Let me try your glasses on, because then I’ll need glasses. [laughter]

Francis Dubé: Let me just do this part quickly, though. Our graphite is very unique; our average size is about 15 microns. Most flake graphites, we’re talking about 200, 300, 1,000-microns flakes. So extremely unique, very different from your typical sedimentary flake graphite. So there is nothing on Earth like it.

James West:   Okay, so what is the advantage of having this type of graphite over flake graphite?

Francis Dubé: Well, the high value now is graphene. The graphene market is, you know, a very high value, very high growth industry right now, and we are able to produce graphene, very high-end graphene – our average was about 2.4 layers; a lot of people that call their product graphene, it’s actually not graphene. It’s, you know, it’s multiple layers, but the graphene is a buzzword, so they use it. But high-end graphene, there’s not a lot of it on the market right now.

So we’re coming in very high with a lot of supply behind us.

James West:   Okay, and there’s a conference coming up that you’re going to be at.

Francis Dubé: Yeah, the Graphene Expo is in Austin, October 15th to 17th. It’s a world event; it’s the premier event worldwide, it’s attracting everybody around the world that’s interested in graphene. So we’ve actually been picked to do four presentations over there; we’re going to do a major presentation, 20 minutes, and then we’ve been picked to do three product pitches: one on concrete, one on jet fuel and diesel, and one on quantum dots.

James West:   Okay, wow. So the path to actually starting production of graphene for these applications, what’s the timeline looking like on that?

Francis Dubé: So again, we’re going to do a very large bulk sample; we’re hoping to yield about 40 tonnes of high-purity graphite, 99.8 percent graphite, with that. And then, you know, another six months to process that into graphene. So probably by the fourth quarter, 2019, we might actually be able to have some product for sale by that point.

Ed Milewski:  Do you know how much graphene you have here? Like, do you –

Francis Dubé: We have 1.4 million tonne resource right now; that’s open at depth. Our PEA back in 2015 gave us a 22-year mine life at 30,000 tonnes per year, and we were using less than 50 percent of our resource for that.

Ed Milewski:  And what was the price back then versus now?

Francis Dubé: Well, back then we were going after the traditional graphite market, your lib batteries, your fuel cells, your powder metallurgy; we were averaging sales of about $7,500 per tonne. The graphene markets, we’re talking many multiples of that number.

Ed Milewski:  Right. And what about your bank account? How’s your cash looking?

Francis Dubé: We took over as May 11, we had a proxy battle; we won that proxy battle very comfortably, and now it’s basically a rebirth of the company, that’s why we’re doing the rename. We’re going with Zen Graphene Solutions. We were able to provide –

Ed Milewski:  I like the name! A name with zen in it – you’ve got to like zen.

James West:   Ommmm. Me too.

Ed Milewski:  I know, we’re kind of zen guys. So okay, so name change, and –

Francis Dubé: New look, new logo, new website –

Ed Milewski:  Who’s your biggest shareholder?

Francis Dubé: Biggest shareholder is actually still our ex-CEO and President, Aubrey Eveleigh, but we’ve got a lot of interest and a lot of other major shareholders as well. So we’ve got a pretty wide base.

James West:   How much does he have?

Francis Dubé: Last count was about 4.6 million shares.

Ed Milewski:  And you’re saying there’s about 50 million shares, now?

Francis Dubé: 64.

Ed Milewski:  That’s not bad.

James West:   And institutional support in this shareholding?

Francis Dubé: Honestly, very little.

James West:   Really? It’s just a big retail crowd waiting for something to happen?

Francis Dubé: Absolutely.

James West:   That’s great.

Francis Dubé: And that’s why we wanted to make some changes and bring a new direction to the company, and we feel very excited about what’s going on in the graphene space right now.

James West:   Very cool. Okay. Price of graphene now, globally?

Francis Dubé: You look at some of the websites with some of the high-end graphene, we’re talking about $200 per gram, which is –

James West:   Per gram? That’s like cocaine. Or gold. Expensive coke.

Francis Dubé: There’s one reference out there from a company out of Australia called First Graphene, they had a reference for $1 a gram when you buy 100 kilograms or more, so that’s kind of the only reference for bulk pricing. So again, graphene is moving so fast that there’s no spot price for this right now, so that’s one of the –

Ed Milewski:  Would somebody want to buy you, would a Chinese company want to buy this company, or -?

Francis Dubé: You know what? Potentially, but I’ll tell you what: not only is this graphene, not only can we generate a lot of jobs and a lot of revenue for our own shareholder base, graphene can help industries be better. So we can actually help other Canadian companies have a leg up in their industry, because of our product. So our goal is really to try to work with Canadian companies, and try to strengthen them.

Ed Milewski:  Ceylon is traditionally a big graphite producer.

Francis Dubé: Yep. And they actually get their graphite, I believe, from Sri Lanka, which is the only other deposit –

Ed Milewski:  Well, I think Ceylon used to be called –

James West:   Sri Lanka. Used to be Constantinople, now it’s Istanbul? One of those situations?

Ed Milewski:  What about Canada? What did Canada used to be called, Sasquatch?

James West:   (unintelligible) No, I don’t know.

Ed Milewski:  Fascinating.

James West:   Okay, great. So then, you don’t need any money right now?

Francis Dubé: We do.

James West:   Oh, you do?

Francis Dubé: Yeah, we did a small placement –

James West:   Got your cheque book with you, Edward?

Ed Milewski:  No, left it at home.

James West:   Sure, that’s what he always says. So you’re doing a small placement, and what’s that to accomplish?

Francis Dubé: Well, we want to redo the PEA. There’s a lot of value in redoing the PEA right now. We did our metallurgy, we increased our recovery from 75 to 90 percent; that’s a big jump. We did it with less energy, and we did it with less reagent costs, so there’s a good, you know, increase in the value of our project based on just the metallurgy.

We’re actually going to study doing a smaller-scale production, going underground mining instead of open pit. We have a 40 to 50 metres of overburden; the original PEA didn’t really assess going underground. With the amount of overburden, it’s very costly to do an open pit, so we can do this as a smaller footprint, better environmentally, and we can start with a much smaller production level, which will reduce our CapEx.

James West:   Okay, well, sounds great, Francis. We’ll leave it there for now and have you back when you’ve got some more updates for us. That’s great, thanks for joining us.

Francis Dubé: Sounds great, thank you for having us.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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