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by Virginia Heffernan on July 20, 2012discovery
At a time when most junior explorers are struggling to attract market attention, Toronto-based Energizer Resources enjoyed a 27% share price gain for the first half of June on the strength of its growing graphite-vanadium resource in Madagascar.
What has investors excited is the discovery of the Molo deposit, a 2-km long multi-folded graphite zone that outcrops at surface and returned intersections of up to 108 metres grading 8.8% carbon in recent drilling. Geologic mapping shows the width of the zone to be 20-400m, while trenching and drilling confirms that the graphite mineralization is continuous over 330 m lengths.
The new graphite deposit is a game changer for Energizer because Molo is shallow, has both high tonnages and grades (the company is anticipating a 100 million tonne deposit grading 6-10% graphite), and contains “ jumbo” flake (+50 mesh) graphite at an average purity of 93% carbon that, unlike most natural graphite, can be easily liberated through simple crushing.
The deposit is located on a joint venture property with Australia-based Malagasy Minerals Limited. Energizer has a 75% interest and is the operator.
It is not uncommon for vanadium and graphite to occur together in nature and both materials are finding new markets in green energy applications. Graphite, in particular, has been a market darling of late because dwindling exports from China, the world’s main graphite producer, have raised prices enough to justify new mines in other parts of the globe.
That combination - a strong market and encouraging exploration results - has prompted Energizer to shift its Madagascar focus from vanadium to graphite and fast track the Molo deposit to production. A drill program designed to establish a 43-101 compliant resource is currently underway and a Preliminary Economic Assessment study is expected by October.
Although outcrop on Energizer’s extensive land package in southern Madagascar is relatively plentiful, geophysics has proven to be an effective tool in delineating Molo and several other graphite zones. A ground-based EM-31 survey outlined surface mineralization even where it was not exposed, while a time domain electromagnetic airborne survey effectively probed the zones at depth.
The EM-31 survey also identified multiple graphitic horizons within each zone. For example, the Molo deposit has five stacked zones within its 2-km strike length, giving it an aggregate strike length of 10 km.
Overall, Energizer has identified more than 320 km of graphitic trends as a result of 3,780 m of drilling, 1,900 m of trenching, 670 prospecting samples, geological mapping, three airborne geophysical surveys, and 160.5 km of ground-based electromagnetic geophysical surveying.
The successful marriage of geological and geophysical techniques can be attributed to the calibre of Energizer’s technical team, says Brent Nykoliation, Energizer’s VP of Business Development. Headed up by Vice Presidents of Exploration Quentin Yarie, and Craig Scherba, the team is part of the same group that successfully identified and delineated chrome and VMS discoveries in the Ring of Fire camp of northern Ontario for Energizer’s sister company, MacDonald Mines.
“There’s very little to no outcrop on the Macdonald properties so it’s very difficult to do any geological work,” says Nykoliation. “The extra knowledge needed to interpret the geophysics there allowed us to go in and interpret the geophysics in Madagascar in a much more meaningful way than anyone else had.”
Energizer imports and models its geophysical, geochemical and geological data using proprietary methods with Geosoft’s Oasis montaj.Target is the application of choice for analyzing and managing the company’s drill projects.
Since acquiring the Green Giant vanadium property in August 2007, Energizer has spent more than $16 million on exploration on the Madagascar land package. Its properties straddle about 80% (120 km) of a regional lithospheric shear zone related to the break up of Gondwana that created the high temperatures and pressures needed to leave behind unusually high grades of both vanadium and graphite.
The property is underlain by highly metamorphosed and sheared quarto‐feldspathic
gneisses, metasedimentary rocks (marble, chert, quartzite, and iron formation),
hornblende biotite gneiss and minor amphibolite, graphitic schist, and granitoid. There are two main directions of faulting that run parallel to foliation.
For Energizer, the adjacent Green Giant and Malagasy properties started out as a base metal exploration projects, changed direction when significant quantities of vanadium were found, and were enhanced when graphite emerged as an important and potentially lucrative target just last year.
The significance of the graphite deposits did not become apparent until Vice President of Exploration Craig Scherba was giving a presentation to the Royal Ontario Museum (ROM) about mineralization at Green Giant, one of the largest 43-101 complaint vanadium resources in the world. The ROM experts noted the usually high carbon grade in the vanadium samples and encouraged Scherba to take a closer look at the property’s graphite potential.
The potential to establish graphite as a credit to the vanadium resource led to a reconnaissance program with the goal of delineating new graphitic trends and comparing them to the graphite associated with the vanadium mineralization. That initial program uncovered several high grade graphite zones and eventually led to the recognition that Molo, in particular, had the potential to develop into an open pit mine.
Energizer expects to have a NI 43-101 report on the Molo deposit ready by the end of this year with production anticipated in early 2015.