#1 Comparing Zenyatta's 5% to Sri lankan 90% is very poor logic. Both are very similar in composition, but Zenyatta's drill intercepts are football fields wide, and the AVERAGE grade across those very wide intercepts is 4-5%. In that 200m+ drill core, there are sections that grade extremely high, and other areas that are low. In comparison, the reason they call the Sri Lankan graphite 'vein' instead of 'lump' (same composition) is because it is found in thin veins, much less than 1 meter wide.
To drill 100m of 'ore' in Sri Lanka and hit 10 such veins would be highly improbable and extremely good luck, but would still yield less than 4-5% average grade. But, in Sri Lanka, the deposits are such that they are never mined open pit, because they do not have sufficient grade. The reason they are mined by hand, chasing the vein into the ground and pulling out just the 90% graphite found in the vein is because they do not actually hit 10 separate 50cm veins with 100m drilling, no matter which direction they point the drill.
Zenyatta on the other hand, finds that 4-5% grade consistently throughout their east pipe which is football fields wide, and football fields deep, and open at depth. So Sri lanka has to chase thin veins, and they do so gladly even though the strip ratio to do so must be enormous, because there is a high enough demand for the product to make the price obtained worthwhile. In sum: comparing an open pit-able resource's average grade to the actual grade found in a vein structure is not even apples vs oranges. It's apples vs turkeys. And you call your 'research' due diligence?
#2 You actually siad this "The Zenyatta deposit contains flake and amorphous graphite in unspecified proportions – it can never be extracted and sold as lump graphite"? Now, even though Zenyatta is listed as ZENYF.PK, it is not a 'pink sheet' stock that avoids strict reporting requirements of the TSX in Canada. There are rules in Canada designed specifically for the purpose of not misleading the investing public, and yet you believe the exchange would allow Zenyatta's management to break those rules numerous times when describing their company and what they have found - lump graphite in massive hydrothermal pipe deposit (similar to Canadian diamond deposits)?
So I imagine that when the Northwest Ontario Prospectors Association (NWOPA) gave their 2012 'discovery of the year award' to Zenyatta earlier this year, it was because THEY didn't do any 'due diligence'. They thought that they should give that award to a low grade flake graphite deposit? Don't let their name fool you, the Prospectors Association is a highly respected organization of professional geologists that sign off on 43-101 compliant resource estimates all the time, for a living, and couldn't possibly want to look like a bunch of ill-informed bush whackers by signing off on Zenyatta's discovery with such an endorsement to the public. But you, wouldn't care. You seem to want others to believe Zenyatta has not found 'lump' graphite in an open pit-able resource. First time its ever been found like that (this is much more significant than Borrowdale or Sri Lanka) and you want the public to believe that it's not true. Throw the gold out of the pan, and go home?
Do you have an unstated motive? Care to show your all too worrisome audience the professional geologist that will swear in front of the professional association or other peers that Zenyatta's is not lump graphite, and that it is just flake?
#3 There are not just two ('different materials') categories of graphite, natural vs synthetic. The are dozen's of kinds of synthetic. There are significant differences between hydrothermal (vein, or lump) graphite (with or without impurities) of various purity levels, and again between flake graphite, small, medium large or 'spheroidized' (which is really just a separate kind of synthetic since it is no longer in a natural form) and natural amorphous powders. These all have different applications, and some overlap (ie are adequate substitutes for each other). You said so yourself. To then conclude that any kind of natural graphite cannot ever replace any of the existing markets that use synthetic ('except maybe batteries'), is not just a contradiction it is bad logic.
Synthetic graphite production is only as large today as it is because of a lack of supply of extremely high purity natural graphite. Sri Lanka can only produce small quantities. All other 'lump' graphite deposits (like the one you apparently like at Canada Carbons' past producing mine) have quickly been mined out, and their production readily consumed by the market at higher than average historical prices at that time. Look back throughout the years, a quick bit of 'DD', will prove this. Only, the population is so big now, and uses of graphite have exploded so much (just the rise in steel production alone), that the synthetic graphite production has had to explode too because flake graphite is very different in its physical properties than lump graphite and/or synthetic. Synthetic has spilled over into application areas that otherwise would have been able to use high purity natural lump or vein graphite but never had a sustainable supply to access. Zenyatta will be able to fill that demand, in several areas, and steal that business from current synthetic graphite manufacturers. 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. For all anyone knows, it may be Asbury that raises the funds to buy Zenyatta's deposit, and keeping the share price down is a worthwhile endevour.
Granted, not all synthetic can ever be replaced by Zen's high purity lump graphite (they still call it lump even after they grind it into a powder because this type of hydrothermal graphite was originally found (Borrowdale, England) in a deposit that hosted the graphite in wider pockets (instead of skinny veins) and could actually be picked out in lumps -although they collected the smaller bits too). That much is true. To say none of the end users will want to take a look at zenyatta's graphite and then determine that Zenyatta's high purity product meets their own specifications adequately enough to replace synthetic, is to pretend that you have all encompassing powers of knowledge that currently, the industry itself does not have because they haven't all been given access to the Zenyatta's final product.
#4 This is actually an argument about what? The prices you can't really get with flake graphite even after you bounce it around and lose 30-70%. If that's the case, your math is misleading. If flake operations lose one third or two thirds the input tonnage, the true revenue per ton would be either ($2650/3=) $883/ton or maybe ($5300/3)=$1766/ton. That's potentailly WAY less than $1800/ton. But that is for a flake graphite operation, which has to physically alter it's product (ballooning costs) in order to go after that kind of market (and I've even heard reports that they lose up to 80% depending on the size of flake that they put in. So, if they can get more than $1200/ton without having to destroy the flakes in the first place, most flake operations (unless they are sitting on a mountain of flakes that they can't sell to another existing market) either won't chase that spheroid market, or won't be able to make money doing so. Not so for Zenyatta IF their end product is acceptable for this sort of end use (purity alone says this is probable).
#5) You are reaching here. You truly want Zenyatta not to work out. Well, the initial round of testing was to determine whether caustic bake works to separate host rock from the graphite. It was determined that it could, and that it yielded extremely high purity graphite (SGS Lakefield labs have the highest re*****tion in the industry) because the host rock is very simple itself. Bonus. Zenyatta is not out of the dark on this yet, as they need to run tests on larger amounts of material to prove commercial application of the caustic bake method. But all indications are good at this point.
And the major difference isn't going to be simply a matter of cost savings. Even if the caustic bake proves difficult and costlier than imagined on a commercial basis, if it can yield 99.99% lump graphite, it's the revenue that will make it much different than a flake stock. which brings us to;
#6 Yes, some of the loony tunes on TCC have been saying Zenyatta will average $10,000 or more per ton revenue. Of course that's a small possibility that may prove true if they can replace one of the major uses of synthetic, but there is one TCC member that has run some numbers based on as low as $3500/ton, and lots of people listen to that logic too. That is a lower price than Sri lankan graphite fetches. It assumes future prices come down if supply can help lower prices. But at a 4% grade, if costs are $1000/ton that means Zenyatta's open pit-able ore is worth $100/ton gross profit. That's better than 2% copper, or 6 grams per ton gold, or any of the existing flake companies that say they are chasing spherical graphite markets - and that is why ZEN is such a high flying stock. Because people are imagining, even conservatively, the cash flows.
Flake graphite stocks, in comparison, have lots of competition, so picking the one that will be the low cost producer and not blow through too much cash, dilution or material trying to find a solution to the supposed demand for spherical graphite requires a lot of due diligence.
Read more at http://www.stockhouse.com/companies/bullboard/v.zen/zenyatta-ventures-inc?postid=21728853#YhTB2c23RybDvM0t.99