So, what I've learned in my time invested in Zenyatta Ventures is simply that the graphite market is one of the most ridiculous, secretive, and hard to understand industries I've ever had the pleasure of learning. Amorphous, Flake, Vein, Hydrothermal, Synthetic… all "lumped" under the title of "Graphite" but vary significantly from one another. No wonder there are so many misconceptions out there even from some of the self-proclaimed "experts" in the industry.

As for myself, by no means do I claim to be an expert here so take it as such. That said, my countless hours of research on the topic has provided me with solid knowledge of the industry and allowed me to see through these misconceptions. Rather than getting into these, however, below is some of my research on why I believe Zenyatta's Albany graphite has the greatest chance for success in the lithium-ion battery market.

Please note that I have taken excerpts from various papers and articles, with the links provided. All of my own comments are in bold font.

Let me start by saying this… ALL GRAPHITE DEPOSITS ARE NOT EQUALS. The way the deposit was formed (metamorphic vs. hydrothermal origin) and the speed, pressure & heat at which it was formed will alter the properties of the graphite significantly, change the crystal structure, and result in some graphite being easier to purify than others. Don Hains from Zenyatta provides a great explanation of the process and importance of the formation of the graphite below:

DH: If you have a standard graphite deposit, the carbon has been transformed into graphite through heat and pressure, but it started from, essentially, an organic carbon source. The Zenyatta material has basically started from a gaseous carbon source in terms of carbon dioxide (CO2) or methane (CH4), probably a combination of the two. So Zenyatta’s graphite hasn’t gone through this combination of heat and pressure. Metamorphic origin graphite is always in what is called a high metamorphic grade rock, in terms of the host rocks that are around; it’s always in a schist-type environment. By necessity you will never get graphite in a metamorphic environment, as pure as you would in the type of origin that the Zenyatta graphite comes from, because there are more contaminants in the rock. There’s more opportunity for incorporation of deleterious material in the graphite crystal. What’s happening in a metamorphic environment is that the host rocks are generally granites and other, by and large, aluminosilicate-type rocks. They could be carbonate-type rocks as well. So you have, under various conditions of heat and pressure, movement of deleterious ions or atoms being trapped in the graphite flakes and bonding between carbon atoms and other material. Simply put, that means that you can’t get this very pure graphite that Zenyatta has. Meaning, that if there are any contaminants in there, they are actually in between the flakes or graphite particles, rather than incorporated directly into the graphite particles. When one processes graphite, the flakes are separated – the graphite particles – so the gangue material (the deleterious stuff in the Zenyatta graphite) disappears, because it’s not part of the graphite. This is in contrast to a normal graphite deposit where some of the gangue material is incorporated into the graphite.

http://investorintel.com/graphite-graphene-intel/understanding-zen-graphite-industry/#sthash.eMZrhQQt.zkmCI7N5.dpuf

So why is this important? Well, it all comes down to ease of purification. What one company can do, DOES NOT mean others can do as well. Zenyatta has been able to achieve what NO other graphite company on record that I can find has been able to achieve when it comes to purification. Utilizing a simple, low cost, caustic roast (with NO acid leach at the end), they have been able to achieve 99.95% Cg without the use of expensive acids or thermal treatment. Let me clarify, other companies have utilized the caustic roast process as well but were NOT successful in reaching the same purity as Zenyatta. In addition, at the end of the process, they leach the graphite with acid. Zenyatta DOES NOT leach with acid, rather they simply wash with water. Once again, Don Hains provided the best explanation of this process:

DH: Generally, you use a combination of heat and acid. The Zenyatta process is a caustic bake. You take the graphite concentrate that you’ve produced in your first stage. The process is, you have your rock and you grind it up, then you mix it into water and you add some flotation reagent that causes the graphite to collect at the top on the surface; bubbles basically. The gangue minerals tend to settle down to the bottom of the flotation cell and you pull those off, and you skim off those bubbles that have graphite particles attached to them. And it goes through a series of these tanks — agitated vessels. And eventually you wind up with a graphite concentrate that will have a certain percentage of carbon in it, plus other stuff that you haven’t been able to fully liberate. Because they’re small enough and they have similar kinds of properties to the bubbles. And that’s true for any graphite processing operation. So then you take that concentrate and in Zenyatta’s case, mix it in with caustic soda (sodium hydroxide) (note: caustic soda and sodium hydroxide are the same thing), so you put that into a furnace (and it will be a rotating furnace, a rotary kiln. The work that was done in the initial stage of test work was not a rotary kiln; it was stationary. It was basically just a container, so the heat transfer is not as good as a rotary mixer/rotary kiln. So we expect improvements in the reaction kinetics. It should speed up the process). But what happens there is that the caustic then combines with the residual gangue minerals that are in your concentrate and basically causes them to form different mineral compounds that are very different from the carbon. So that stuff comes out of the kiln (and they may or may not cool it down, depending on what’s more effective in terms of the leaching) and you rinse it with water. And what happens is the carbon stays there and the minerals basically get washed away.

Typically, for natural graphite to meet the required specifications to be used as a component of the anode for lithium-ion batteries, the graphite needs to be purified to very high levels (>99.9% Cg) and the material also needs to be spheroidized. To understand this concept, please read the following from TMR:

Battery-grade graphite requires very high purity levels, typically >99.9% carbon-as-graphite (Cg). This material also needs to be spheroidized using careful processes that convert the flat graphite flakes into potato-like shapes, which pack much more efficiently into a given space. The high purity levels and the enhanced "tapping" density (to >0.9 kg/m3) are important for producing the high electrical conductivity that is required during anode operation.

Spheroidizing the graphite flakes also reduces their size, a process known as micronization. Standard battery-grade materials require an average diameter of approximately 10-30 μm, so in theory, feedstock materials with flake sizes greater than 30 μm (+400 mesh) could be used. However, starting purity levels tend to decrease with flake size, so flake material with an average diameter of 150 μm (+150 mesh) or greater is typically used. This is, of course, a double-edged sword, since the larger the flakes used, the more energy will be required to reduce the average size of the flakes to the desired 10-30 μm. Smaller particles are preferred, as this makes it easier for the lithium ions in the electrolyte to diffuse between graphite particles.

It should be noted that it is the tendency for purity levels to increase with flake size that is the real reason for the common 'mantra' that for battery-grade materials, the bigger the flake size, the better. In fact, the ideal precursor material would have small flake size if it had sufficient purity levels for the subsequent processing to be cost-effective.

One other important factor in the production of battery-grade materials is that of wastage. The standard spheroidizing and micronizing processes used in China waste up to 60-70% of the mass of total graphite flakes present during processing. Therefore, for every one tonne of spheroidal graphite produced in China, approximately three tonnes of feedstock materials might be required (though the waste materials can be used for other purposes). The graphite may be purified before or after spheroidizing and micronizing, depending on the manufacturer.

http://www.techmetalsresearch.com/2014/03/going-natural-the-solution-to-teslas-graphite-problem/

So what did we learn from this. First off, the high purity necessary of >99.9% Cg. Secondly, small flake sizes are harder to purify than the larger flake sizes. Hence, the common saying out there that the bigger the flake size the better. In some application, that saying does hold true. For batteries, ideally it is not. Typically, flake graphite greater than 150 microns is used as it easier to purify than smaller flake. This graphite is purified to >99.9% using expensive acid or thermal treatments, spheroidized and micronized to meet certain specification. The more crushing, grinding and processing you do, the more you effect and essentially damage the crystal morphology of the graphite. Throughout this spheroidizing and micronizing process, you lose anywhere from 50% and up to 70% of your feed stock. These significant losses and expensive processing methods are a barrier for anyone trying to compete with China.

So how does this all apply to Zenyatta? From Mr. Tadashi Yamasita's recent presentation in Japan, we've learned the following regarding Zen's particle size distribution:

Hexagonal crystal structure

D10: 7.5 Microns (meaning 10% of the graphite is smaller than 7.5 microns)

D50: 13.3 Microns (meaning the median particle size is 13.3 microns)

D90: 39.5 Microns (meaning 90% of the graphite is smaller than 39.5 microns)

>99.95% Cg by GDMS

http://sky.geocities.jp/kanadatoshishigen/material/zeyatta2014.pdf

You will note that the particle size distributions fall between 7.5 microns and 39.5 microns and 99.95% Cg. ALREADY meeting the required particle size and purity for lithium-ion batteries WITHOUT the need go through acid/thermal purification, spheroidization or micronization (IMO). Please take a look at the following link from Elcora Resources (where Dr. Flint works from that great interview on investor intel) and note the chart on micron sizes and the following paragraphs.

Ball graphite is essentially larger flakes that are rolled into a ball. This is typically done with jumbo sized flakes but can be done at smaller particle sizes. At the 300 micrometer size a recovery of about 80% is anticipated. As smaller sized particles are used this recovery is lowered. It is anticipated that the recoveries might be as low as 50% at sizes smaller than about 150 micrometers. These recoveries are estimates based on personal interviews with operators and are not substantiated with rigorous test work or documentation and are used as a guide only.

Figure 5: Graphite sizes used for lithium ion batteries. Direct use refers to graphite that can be used without further processing and ball graphite refers to graphite that has been folded into spheres. In both cases specific surface area requirements must be met.

http://elcoraresources.com/graphite-consumption/

Note that we fall within the particle size range on that chart for "Direct use". Ahh but the pundits will say Zen will still need to be folded into "potato shapes" or spheres as they say in order to meet specific surface area requirements. I'll let Don Hains take care of that one:

DH: It certainly can fit into use in lithium-ion batteries and other battery applications, as a component of the anode. You need high-purity graphite there. Everybody is talking about, ‘oh you need large flake because then you produce the spheroidal graphite that is needed in the anodes’, but the losses there are quite high in terms of the production process. If you have material that will give you the same surface area – and what they’re looking for is surface area – and the surface area that has been evaluated to date on the Zenyatta material is comparable to other products/materials out there and certainly to synthetic graphite. And so that is without doing any post-processing at all. That’s the stuff that came out of the initial test work; nothing’s been done to that at all. That was the final product that came out and it is what it is, and has not had anything else done to it. It has a comparable surface area to the materials that are currently being used, it’s highly crystalline and that’s quite desirable in most of these applications. High crystallinity translates to high conductivity, with minimal adverse impacts in terms of performance of the product and so forth.

But what about electrical resistivity and conductivity they may say?

Published physics data on electrical resistivity of graphite typically ranges from .003 to .060 ohm-centimetres. Zenyatta’s graphite showed a resistivity of .0034 ohm-centimetres for a compressed bulk graphite test bar measuring 50x12x2.4mm. These results are comparable with high grade synthetic graphite and represent a value at the top of the range.

They've provided the particle size distribution but can they upgrade all flake sizes to that purity? A valid question, one of which hasn't been confirmed with released data at this time. However, as we are aware that it is harder to purify the smaller the flake size, and that the typical flake size is between 7 and 40 microns, and that they achieved 99.95% Cg by GDMS, it's my opinion that most if not all can be upgraded to that purity through a simple caustic baking process. From Zenyatta's press release and Don Hains once again:

The entire 170 metre graphite zone from drill hole 5 was used for this testing. All trials using a simple caustic baking leach process conclusively demonstrated that an ultra-high purity graphite product with >99.97% Carbon (“C”) can be produced from the Albany graphite deposit. The process was successfully applied to a variety of graphite concentrate samples that had initial carbon grades in the range of 46 – 90% using conventional flotation techniques. In all trials the final purity values were >99.97% C and up to 99.99% C in many cases, regardless of initial carbon grades.

Don Hains: And regardless of the grade of the concentrate that went in to the final purification process, they were able to produce the >99.99% material.

Why are they so quiet? It's the nature of the industry, simple as that. Graphite does not have spot prices like gold or silver as every sample is different from the other. Pricing is determined on a customer to customer basis. Confidentiality agreements are required and Zen has over 25 of them with major corporations and 10 with resource facilities. Testing is everything and requires time. Re-watch Dr. Flint's interview below as he provides great insight to the industry and clarifies some of the other misconceptions.

http://investorintel.com/graphite-graphene-intel/elcoras-dr-ian-flint-teslas-challenge-find-graphite/

The Biggest validation for me, however, was the signing of Dr. Bharat Chahar as VP of market development. This guy was a major player in the industry as the head of the CPREME division at CP, understands how to mill & refine graphite to meet strict customer specs, and has the contacts necessary to make deals happen. Read some of his research papers on graphite for li-ion batteries if you don't understand what this guy brings to the table for Zenyatta. An example below:

http://www.evs24.org/wevajournal/php/download.php?f=vol3/WEVJ3-6740576.pdf

For these reasons and others I don't feel like typing, I truly believe Zenyatta has the best shot at the lithium-ion battery market. That said, there are many other markets such as fuel cells and the high purity powder market that are of equal importance and shouldn't be discounted by any means. Zen will have its day and with material already in end users hands, it could be sooner than you think.

TaKeNoTeS