Very comprehensive post by Haitokins. Agreed with most of the post, with the following comments:

#1. It's correct to say that the Sri Lanka grade is much higher than Zen, but they have thin veins compared to large volume that ZEN has. Plus they have to chase the veins in an underground operation (extremely labour intensive) compared to ZEN open-pitable using modern equipment for high volume graphite production.

Note for Sri Lanka graphite: Their veins are in the range 10-60 cm, and they have lumps. Lump graphite does not have to be huge to earn that title. See classification by the company below. There are old pictures (believe it's the Globe & Mail article some years back) of women sitting on the floor of the mine sorting the "lumps" (the size of a walnut) by-hand to pile them up on the floor before putting them into bags to be carried out by men. Yes, sorter are women, drillers are men operating hand-held drills and they are often shirtless and covered with graphite powder and quite often without masks (it's hot down there).

STANDARD PARTICLE SIZE
		+10mm : Lumps 1.7-5mm : Bold Chips 0.5-1.7mm : Fine Chips -0.5 : Chippy Dust -10+60 mesh : Flakes -40+100 mesh : Flakes Type Powder -200 mesh : Powder

#2. There were some ZEN core samples that ZEN geos (presumably) marked with arrows pointing to a "large" area that has a consistent colour with a label "lump", see for example hole 4F2, extreme right pic. Yes, Mickey Fulp (quoted by Ms. Davis) had it wrong back in June by saying that ZEN has amorphous graphite (and Aubrey has responded to keep the records straight).

#3. Ashbury: "That's why anything that Asbury Carbons has to say about this probable competitor in the making has to be taken with a pinch of salt - and maybe even a lie detector test. asbury carbons is there to protect their shareholders, not the shareholders of a different company with a competing resource."

Ashbury is in the marketting business as well and would want new business to go through their channel (for collecting royalty or marked-up). They don't really want new company to sell the stuff to the same set of clients.

#4. Flake graphite: (and I've even heard reports that they lose up to 80% depending on the size of flake that they put in...). This is a general statement and would have to read with a qualifying note: For small flakes this is true (e.g. from China, since they don't have much large flakes). But, for large/extra large/jumbo flakes the loss would be about 30%.

#5. Mickey was wrong here as well, he said ZEN uses acid...no it's caustic baking (Ms. Davis should have verified the details to assess the credibility of her source for a specific case...Mickey said in the same interview that he is a generalist and not a specialist in the graphite space). It has been shown (by SGS?) on bench scale that 99.99%C could be achieved. What remains to be shown would be the cost involved for large scale.

#6. Agreed. We don't have to follow Gordon Gekko's "Greed is good" (It's Michael Douglas in Wall Street). Exorbitant price/revenue prediction may not be realistic (it would be much more difficult to achieve). I would settle for some reasonable profit (revenue - cost), say some $2000/tonne would be plenty. Even for a 20,000 tonnes/yr operation the profit would be $2k x 20k/year = $40M. If there a demand the the output could be scaled up, say x5, then $2k x 100k/year = $200M/year. Not too shabby!

General remark:

- Ms. Davis appeared to pit vein against flake. I don't think we need to take on this challenge and fall in the trap (a more balanced story, devide and conquer, etc).

- Street Sweeper has put in the disclaimers that say they are shorting ZEN, and at the same time buying shares in some other companies. I would tend to believe in the former since this is a lot more lucrative (with a huge holding) if the Davis's story helps bring down ZEN SP, but the latter may just be a decoy (just some token holdings?).

- In my opinion, shorting should be outlawed.

goldhunter