Emerging Graphene Technology Company
Hydrothermal Graphite Deposit Ammenable for Commercial Graphene Applications
Message: Roth Capital Partners: Buy rating and $6 price target for Zenyatta Ventures
Roth Capital Partners: Buy rating and $6 price target for Zenyatta Ventures Limited
According to Roth Capital Partners:
http://fs1.hidemyass.com/download/CDJEu/qd9hu2431gd15rn1msim6uuit7
September 5, 2013
ZEN: Albany Project Coming in Larger than Expected; Reiterate Buy
ZEN is wrapping up its summer drilling campaign and making steady progress toward releasing its NI 43-101-compliant resource estimate by early CQ4’13. Initial summer drilling results suggest that ZEN’s Albany resource may be larger than expected, which drives our increased PT to $6 from $4. We reiterate our Buy rating and see several positive catalysts in the months ahead.
- Initial drilling data may indicate a larger-than-expected resource. We believe preliminary data points from ZEN’s summer drilling campaign suggest a potentially larger ore body vs. our initial expectations, and as such, we are revising our model upward by ~80% to include ~23mn tonnes of ore at 4% grade vs. prior ROTHe of 13mn tonnes at 5% grade. We believe this estimate is likely still conservative, as it takes into account a scaled-down east pipe, leaving the west pipe as potential upside.
- ZEN is wrapping up its summer drilling campaign. To date, ZEN has drilled 38 holes. The current drill campaign calls for an additional 8-10 definition holes, along with three large diameter holes to compile a five tonne mini-bulk sample for metallurgical testing. Upon completion of the final holes, ZEN expects this data to be compiled in an NI 43-101-compliant report by early-CQ4’13. ZEN engaged RPA as an independent consultant to conduct its NI 43-101 resource estimate in Jun’13.
- ZEN is collecting mini bulk samples for ongoing metallurgical analysis. ZEN is currently drilling three large diameter holes in the east pipe to collect a five tonne sample for metallurgical test work at SGS Lakefield. On 9/4, ZEN announced that the larger rig had intersected multiple zones of graphite breccia at > 464m.
- ZEN’s cash balance appears healthy. With $9.6mn on its B/S as of FQ1’14, we believe ZEN has enough cash to complete its NI 43-101. Management is budgeting $7.5mn for its summer drilling campaign and NI 43-101, and has likely already spent a material portion by FQ1’14. Beyond the resource estimate in CQ4’13, we model an interim raise of $10mn in FQ4’14 to shore up funds for a potential PEA, and a potentially larger raise in mid-FY’15 to complete a full feasibility study.
- We reiterate our Buy rating and increase our PT to $6. Our increased PT is largely due to an increased ore body estimate. We continue to expect upside catalysts ahead, including (1) an NI 43-101 resource estimate by CQ4’13; (2) favorable beneficiation tests; (3) a target date for/completion of a PEA; and (4) MOUs with potential customers.
http://fs1.hidemyass.com/download/CDJEu/qd9hu2431gd15rn1msim6uuit7
September 5, 2013
ZEN: Albany Project Coming in Larger than Expected; Reiterate Buy
ZEN is wrapping up its summer drilling campaign and making steady progress toward releasing its NI 43-101-compliant resource estimate by early CQ4’13. Initial summer drilling results suggest that ZEN’s Albany resource may be larger than expected, which drives our increased PT to $6 from $4. We reiterate our Buy rating and see several positive catalysts in the months ahead.
- Initial drilling data may indicate a larger-than-expected resource. We believe preliminary data points from ZEN’s summer drilling campaign suggest a potentially larger ore body vs. our initial expectations, and as such, we are revising our model upward by ~80% to include ~23mn tonnes of ore at 4% grade vs. prior ROTHe of 13mn tonnes at 5% grade. We believe this estimate is likely still conservative, as it takes into account a scaled-down east pipe, leaving the west pipe as potential upside.
- ZEN is wrapping up its summer drilling campaign. To date, ZEN has drilled 38 holes. The current drill campaign calls for an additional 8-10 definition holes, along with three large diameter holes to compile a five tonne mini-bulk sample for metallurgical testing. Upon completion of the final holes, ZEN expects this data to be compiled in an NI 43-101-compliant report by early-CQ4’13. ZEN engaged RPA as an independent consultant to conduct its NI 43-101 resource estimate in Jun’13.
- ZEN is collecting mini bulk samples for ongoing metallurgical analysis. ZEN is currently drilling three large diameter holes in the east pipe to collect a five tonne sample for metallurgical test work at SGS Lakefield. On 9/4, ZEN announced that the larger rig had intersected multiple zones of graphite breccia at > 464m.
- ZEN’s cash balance appears healthy. With $9.6mn on its B/S as of FQ1’14, we believe ZEN has enough cash to complete its NI 43-101. Management is budgeting $7.5mn for its summer drilling campaign and NI 43-101, and has likely already spent a material portion by FQ1’14. Beyond the resource estimate in CQ4’13, we model an interim raise of $10mn in FQ4’14 to shore up funds for a potential PEA, and a potentially larger raise in mid-FY’15 to complete a full feasibility study.
- We reiterate our Buy rating and increase our PT to $6. Our increased PT is largely due to an increased ore body estimate. We continue to expect upside catalysts ahead, including (1) an NI 43-101 resource estimate by CQ4’13; (2) favorable beneficiation tests; (3) a target date for/completion of a PEA; and (4) MOUs with potential customers.
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