According to Kirk McKinnon, Chairman and CEO, "We were able to fast-track the Green Giant project and Molo deposit because of our exploration experience and early exposure to Madagascar. Energizer discovered vanadium in 2007 and completed a NI 43-101 resource, ranking our vanadium project as one of the largest known vanadium deposits in the world.
Through that period, we gained significant insight into the battery power and storage market and this exposed us to the fact that natural flake graphite is a substantial raw material in vanadium-redox batteries. We were also able to understand the critical role that graphite continues to play in lithium-ion batteries. We also noted that graphite, like vanadium, has a long and established role in the steel industry.
Consequently, the Company determined that although we had an excellent NI 43-101 compliant vanadium deposit, the market demand for graphite products was both stronger and more imminent. The energy requirements and capital cost to develop a vanadium mine was significantly higher than moving forward with a graphite mine not to mention the relative simplicity of processing graphite. Internally, we confirmed the quality and quantity of graphite at Green Giant and given what we deemed to be ease of development for the graphite, we felt strongly that in the short term, this was the best way forward to improve shareholder value
We completed a joint venture agreement with Malagasy Minerals to secure the rights to all Industrial Minerals within the surrounding area of the Green Giant property. After defining graphitic trends through geo-physical methods and extensive soil sampling, we immediately moved to drilling off a NI 43-101 compliant graphite resource at Molo. This included an Environmental Baseline Study, which was implemented under the Canadian Environmental Standards Guidelines (e3 Plus).
As we did with vanadium, we set about to understand the graphite market beyond our insights already established with vanadium. We found a rapidly evolving graphite market, with over 84 exploration companies managing approximately 150 graphite projects worldwide, however many were in only in the 'infant' stages of exploration. Of those 84 companies, only 3 have completed a PEA study, and only one has completed a Full Feasibility study. The consensus from industry analysts is that only 2 to 3 projects have the necessary criteria to make it to production. We also learned that there has not been a new graphite mine constructed outside of China and Brazil within the last 25 years.
Off-take producers were dealing with an explosion of new graphite demands from EVs, battery power, battery storage, foils as well as the consistent demand for graphite in refractories. The off-take players for graphite knew what they wanted but nobody could accurately define demand and give any meaningful insights into new evolving products and uses for graphite. All anyone really knew was that the graphite demand was fast-tracking.
Unlike gold, silver or base metals, without market understanding and a graphite product capable of meeting certain specifications and price points, there could be no mine development.
From the outset, we recognized the importance of building a strong interface with government and government officials of Madagascar, such as the Prime Minister and Minister of Mines, and to cultivate a positive experience at the local level in order to ensure acceptance and desire for our project to move forward. We have done both.
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