Issue link: http://resourceworld.uberflip.com/i/198816
mining Energizer Resources leads rebuilding of the next mining frontier by David Forest There are major changes afoot in the obscure island nation of Madagascar. Changes that could be great news for die-hard explorers there like Energizer Resources Inc. [EGZ-TSX], which has kept the torch burning in a place that might be the world's next mining hotspot. Five years ago, it looked sure that Madagascar would play a big part in the future of the global mining industry. The nation was going through a radical reformation. After 30 years in socialist isolation, political leaders were reopening the country for business. Particularly under President Marc Ravalomanana's "I Love Madagascar" party, that swept to power in 2002. Ravalomanana was a businessman – and his regime supported the development of numerous industries, including mining. As it turned out, there was great potential to nurture. By 2009, not one but two major mining projects were in full swing in the country: Rio Tinto's Fort Dauphin titanium project, and Sherrit/Sumitomo's Ambatovy nickel-cobalt mine. Both of these billion-dollar projects were among the largest mines being built on the planet at the time. Even the exploration sector in Madagascar was humming – in mid-2008, Canadian explorer Pan African Mining was bought for $140 million by Asia Thai Mining, for the company's Madagascar coal projects. The enthusiasm was justified. Geologically, Madagascar lies somewhere between South Africa and India; both are known for their extensive mineral riches. The only difference being that Madagascar has historically seen little exploration across a land mass larger than the state of California. But the country's promise of becoming a world-leading mining frontier hit a snag in 2009. A military coup deposed the business-friendly president Ravalomanana and installed his rival, Andry Rajoelina – then mayor of capital city Antananarivo, and a former night club DJ. After the coup, Madagascar's once well-organized minerals regime fell into disarray. Exploration by western mining firms slowed to a crawl, suggesting that the country's bountiful potential might once again be left to molder. But a handful of explorers kept the watch, even through the difficult years – Energizer Resources, developer of massive graphite and vanadium deposits in south Madagascar, being one of the leaders. Today, it looks like Energizer's patience may pay dividends as this nation once again appears on the cusp of re-opening for business. Even during the bad times, the prize Energizer saw on its Madagascar concessions made the company push hard to maintain operations here. Particularly at the Green Giant project – site of one of the largest graphite deposits identified on Earth. Green Giant's size and richness give an idea of the mineral potential waiting to be won in Madagascar. The deposit currently contains nearly 125 million tonnes of resource, grading over 6% C. Incredibly, that resource lies within just one zone (called Molo) out of 17 graphite-bearing areas identified to date – extending along a strike length of over 320 km. There are few places in the world where deposits this large can be found, even fewer where such ores weren't mined out decades or even centuries ago given that this kind of size and grade make mining and processing exceptionally simple. Not to mention the fact that Molo lies immediately at surface, lending itself to mining at a very low strip-ratio. Even Molo's metallurgy is unique among graphite deposits globally. Recent test work here shows that a nearly half of the graphite extracted from the site occurs as large flakes – a form of graphite that commands a premium price in global markets. Today, flake graphite trades around $1,500 per tonne – and that's after falling from a high of over $2,500 per tonne in early 2012. Pilot processing plant at SGS Lakefield will prepare Molo's graphite material for offtake distribution. Photo courtesy Energizer Resources Inc. 38 www.resourceworld.com november 2013