Good Morning,

I've received quite a few emails by befuddled investors wondering why Zenyatta Ventures (ZEN.V/ZENYF) has sold off so much after the PEA was published on Monday. I'm going to take a brief stab at why that is but will really dig in with a new detailed report that I will release early next week. First, this PEA was a long time coming as it was delayed almost a year from when it was initially expected. I believe the "buy on rumor-sell on news" phenomenon was strong here as some people said to themselves I'll get out when the PEA is announced. Once the stock did not go up on the news, herd mentality kicked in this past few days.

However, I do not believe that the PEA was fundamentally negative. In fact, the most significant data point, operating costs/margins, exceeded my expectations. We're talking about a very conservative firm (RPA) confirming that ZEN will sell minimum 30,000 tonnes of high purity graphite at $7,500 per tonne with approximately $5,500 of that being profit. In my opinion, the average selling price will be higher than $7,500 and the demand for ZEN's unique graphite will be greater than 30,000 tonnes per year. But even if they are correct, this is a pre tax cash flow business of over $150,000,000 per year for decades!

The only piece that surprised me at all was the CAPEX coming in over $400 million to build the mine. However, RPA used huge contingency costs that padded this estimate too much. In pre feasibility to feasibility, this number will come down, probably much closer to $300 million. The use of a 10% discount rate is very significant because once we use even an 8% discount rate (more appropriate for this stage I believe), with more than half of the graphite that we know we have (I still don't think there is any technical or grade issues here--they were just being way too conservative using less than half of the 1.4MM tonnes we know is there), the Net Present Value is nearly $1 Billion.

Once in production, we may find that the Albany graphite mine will be one of the most profitable in all of Canada. There is no other hydrothermal graphite deposit like this in the world. Zenyatta cannot be compared to flake graphite companies because it is comparing apples to oranges. Trillions of tonnes of flake graphite blanker the earth, which is why even the purest product sell for barely over $1,000 per tonne. ZEN's graphite will command close to ten times what the typical flake graphite will get in the marketplace AND the applications are different.

The PEA just confirmed to me that A. Albany will in fact become a mine. B. It will be one hell of a profitable mine. C. Zenyatta will be bought out before taking this into production themselves.

The upside from the current $1.45 price is huge for long term investors. Check out the chart attached which displays that we may be trading right at lows/support via the red trend line and oversold RSI. We now have an $80MM market cap company that owns a monster asset which will be enormously profitable for decades to come. I'm reiterating my bullish stance on Zenyatta Ventures (ZEN/ZENYF) and suggest believers take advantage of this weakness and buy.

I am long shares of Zenyatta