This was a classic "pump and dump", perhaps not by the same people, but it provided an opportunity for a dump following over-enthusiastic (extravagant) predictions. Predictions of order 60-100M tonnes without any allowance for potential margin of errors would set up for a fall like one of yesterday.

It would be much better to start with some number like 13M tonnes as in Roth report which is in my view is a (very?) conservative estimate (my own back of the envelope using a showbox model came up with 27 M tonnes ore assuming only the East pipe, anything from the West pipe would be gravy on the top).

http://agoracom.com/ir/Zenyatta/forums/discussion/topics/580661-roth-report/?message_id=1821675#message_1821675

The initial NI resource estimate of 25 M tonnes @ an average grade of almost 3.9% Cg by Rosco Postle Associates Inc (RPA) is not bad at all. Most of the stuff (80%) is in the indicated category and 20% is in the inferred category. Note also that the East pipe contains more than half of the inferred resource (10 M tonnes @ a much higher grade of 5.6% Cg). This high grade zone could be developed first to reduce the required initial Capex.

Similarly, the annual production rate has been widely assumed by many posters to be 100,000 tonnes/yr (Eveleigh should hold this back as well) . Roth report assumes 25,000 tonnes/yr which may be conservative, but this number still provide a nice profit for ZEN. Let's hold back in the production rate of 100,000 tonnes/yr a bit , say assume only 50,000 tonnes/yr. This number still produces a healthy profit for ZEN. In addition, this would stretch the period of production by a factor of 2. We don't really need 100,000 tonnes/yr, since flooding the market would be detrimental to the graphite price. Stay away from using numbers like $20,000/tonne (since this would set up another "pump and dump opportunity). A more reasonable $8000/tonne is good enough. In fact, we should think in term of net profit margin: A $2000/tonne profit (50k tonnes x $2k/t = 100 M/yr ) is just plenty. A $3000/tonne net profit would be much better, etc.

In summary, starting small/low numbers with an option to scale up would be a good strategy for ZEN and ZEN followers.

Overall, the initial NI resource estimate of 25 M tonnes is quite good and promising, knowing that consultants such as RPA are generally conservative in their predictions for NI estimates. Unlike "freelance speculators", myself included, these consultants have their reputation and professional standing on the line.

goldhunter