Hello Mark,

Your post says: "a second phase processing of a mini-bulk sample at SGS Canada Inc. ('SGS') in Lakefield. This processing will allow additional optimization of the flow sheet for the preliminary economic assessment (PEA) and provide material for further testing by Zenyatta and interested parties who have requested material.”

and

“the Company has been approached by many global corporations and academic institutions requesting Zenyatta's unique ultra-high purity graphite material for testing in their own labs. Additional processing at SGS will provide enough ultra-high purity material for release to these various parties."

Wonder why the Roth Report (3 Dec) said end-users have not yet been able to c/o independent commercial testing?"

My comments are as follows:

Presumably your last paragraph refers to the 2nd paragraph under RISKS on page 3: Commercial verification:

"ZEN has not provided potential off-takers with graphite samples for commercial verifications. If ZEN's graphite quality were to fall short of market requirements for synthetic graphite, ZEN could be negatively affected".

The first part, "has not provided the sample for commercial verifications" could be true. But, perhaps the samples from the second phase processing are not ready to be given out to potential off-takers. Or, ZEN may want to do its own testing first, before dishing the samples to the world. The priority for ZEN (or any company in this business) would be to produce the high-quality graphite first for the purpose of producing the PEA.

As far as the sample distribution and or testing go, the company may have various options depending on the requirements from each potential off-takers. Also, the company may want to have some control over this process, since dishing the samples out left and right to any company may produce time wasting goose chase. Similarly, the company may not want to provide its own testing for just anybody with little prospect (again a waste of time, money and effort).

I know another company which has decided to deal only with selected (the serious type) potential off-takers and provided test to meet their specific requirements (with non-disclosure agreement of course). If the company's own tests provides the material that meets the potential off-taker's requirement then the off-taker may request samples for its verification, but the company would want some kind of off-take commitment from the off-taker, subject to positive verification to be carried out by the off-taker. Things would get interesting, if the process involves some proprietary methodology which is owned by the company. Presumably that would be part of the off-take commitment.

I would venture to make a guess that no samples from the second phase would be given out until after ZEN has the PEA ready. Then, they will go though a selection process to weed out the "tire kickers" and deal only with a few serious off-takers (with potential sizable order).

As I understand it, this is a commodity that must be tailored to meet specific customer's requirements, and not a general "commercial" requirement.

goldhunter