In 2011, Zenyatta Ventures’ northwestern Ontario property showed promising mineralization of copper, nickel, and precious group metals. But as it took a closer look, the company instead found one of the largest, and only, known hydrothermal graphite deposits in the world.
Dubbed the Albany graphite deposit, the mineralization is located 30 kilometres north of the Trans-Canada Highway near the communities of Constance Lake First Nation and Hearst. After gaining the financial support and technical expertise of Cliffs Natural Resources, the same company developing the Black Thor project in the Ring of Fire, the Thunder Bay-based junior miner raised $10 million in capital and went off to drill some targets.
“That was when we made this very significant graphite discovery,” said Aubrey Eveleigh, Zenyatta’s president and CEO. “This graphite deposit is amazingly valuable and special, so it’s one of a kind in terms of size and style.”
Of the three known types of graphite deposits—flake, amorphous and hydrothermal (or vein)—hydrothermal graphite is the purest, but also the rarest. The only operating vein graphite deposits in the world have been mined in Sri Lanka since 1847.
“It was the Sri Lankan deposit that gave us a lot of information about this particular hydrothermal style,” Eveleigh said. “We found out that it was easy to process, cheap to process, it was some of the most valuable graphite in the world, and, of course, demands the best price, so we knew that we were on to something fairly significant very early on.”
Initial results from a 2011 drill program, analyzed by SGS Canada, show the mineralization has 99.6 per cent purity or higher, indicating a clean and high-quality product, Eveleigh said. As a follow-up, the company is now embarking on a 10,000-metre, 40-hole drill program to determine the deposit’s size, with results expected to roll out this summer. The company signed an exploration agreement with Constance Lake First Nation in 2011.
Synthetic graphite commands the highest market prices due to its purity, but it can be costly to produce. Natural, high-quality graphite is becoming more sought after for its inexpensive production costs and variety of applications.
“There’s a lot of traditional uses that obviously created a lot of demand for graphite in the last 100 years, but then most recently we’ve been seeing a real surge in demand for real high-quality, high-purity, greater than 99 per cent in the new clean-tech sectors,” Eveleigh said.
Used in car components, stainless steel production and even pencils, graphite is now being tapped for the production of lithium-ion batteries, smart phones, laptops, electric vehicle batteries and fuel cells. It’s also needed for nuclear reactors.
By April, the company had $6 million in its treasury, and Eveleigh expected another $4 to $5 million in warrants coming in, resulting in all the capital the company needs to complete its drill program and take it through to its preliminary economic assessment (PEA).
Eveleigh anticipates preparing an NI 43-101 resource report by August of this year and the PEA by the first quarter of 2014. Zenyatta will then go into full feasibility and start the process of getting permits in place. Based on the results to date, Eveleigh said he’s “quite confident” the resource report will be positive.
Though details will be worked out in the feasibility study, Eveleigh said the project will likely start with an open pit, since the mineralization is just below the overburden.
“There’s about 30 metres gravel on top of a thin layer of limestone and then you go right into the deposit,” he said. “We’ve drilled it down to about 400 to 500 metres, and we’re thinking open pit down so far and then a ramp from the bottom of the pit to deeper.”
Eveleigh planned to spend the next few months stateside to drum up interest in the project, but the company’s already receiving recognition for Albany.
In April, Zenyatta earned the Bernie Schnieders Discovery of the Year Award from the Northwest Ontario Prospectors Association, which recognizes an exceptional discovery in Ontario in 2012, and Zenyatta was also recognized as the top performing company from the mining industry sector on the TSX Venture Exchange in 2012.
