G

Thanks for a nice summary from your friend who spoke to AE.

In my opinion, the initial NI resource estimate is quite good (and consistent with what I have been guessing). As indicated by the NI estimate, the East pipe contains high Cg grade with a large chunk @ 5.6% Cg. This chunk is also near the surface hence it should be mined first. I have suggested this to AE many months ago, but not sure if he was listening. The idea is to stay shallow, since a huge deep pit would require an initial large Capex. I would start with the East pipe, and go down to about 300-400m to get the good stuff, over 5%, out first. Make some decent profit and moving West using part of the profit to fund this expansion.

There would be no need to go deep, since ZEN has plenty of high grade (and high quality) graphite to last for many years.

I also would advise AE to adopt a conservative approach (not to be too ambitious), i.e. not to go for 100,000 tonnes/yr, since 50,000 tonnes/yr would be enough to provide some decent initial profit. Scale up as required if there is a demand for ZEN high quality graphite (to avoid flooding the market with an initial huge production that would bring the price down).

Roth assumption of 25,000 tonnes/yr still yields some impresive results (between $6-15/s...I would take $10/s).

Confucious says: Start with a low expectation and the possibility for it to go up is higher.

(Similar saying: The higher you fly the harder you fall).

goldhunter