Zenyatta Board of Directors' Letter to Shareholders 5 April 2018
On behalf of management and the Board of Directors, I want to thank you for your loyal and passionate support as a shareholder. We very much appreciate your confidence in our team and your patience while we achieve the various Albany project milestones to date. Zenyatta is looking forward to communicating our advancement of key objectives under the present strategic plan.
Zenyatta’s Albany graphite deposit is a ‘one of a kind’ discovery with an incredible opportunity.
Zenyatta has a significant competitive advantage with 100% ownership of a rare and high-quality supply of a carbon source material from the Albany deposit, in Canada. Extraordinary value can be assigned to business opportunities that are unique. We perceive that they are free from some of the normal disciplines of competition, allowing for extraordinary profits.
Recently, the Company made a strategic decision to focus on the extraordinary nanomaterial called graphene, which has been shown to easily convert from our high purity, crystalline carbon material. Graphene is emerging as the most promising new material in modern times for enhancing applications in various industries due to its unique combination of mechanical, electrical and thermal properties. Graphene, a single sheet of carbon discovered in 2004 at the University of Manchester, can perform all of these functions. Zenyatta has created significant additional value for the Albany carbon material. It is a consistent and high-quality nanomaterial, with excellent dispersion properties and therefore is highly suitable for enhancing present day composite materials like rubber and concrete, as confirmed by the University of Sussex and Ben-Gurion University respectively.
In business, unique is not only an opportunity but often leads to challenges, especially for an industrial mineral. With no historical knowledge or direct experience to draw from, it requires extensive and repeated testing to prove that the nanomaterial works in various applications. During 2016-17 market development process the Albany carbon material proved it was highly suitable for many different applications.
We are very fortunate that Aubrey Eveleigh and the Zenyatta discovery team were tenacious and successfully identified at an early stage that the Albany carbon form was not only extremely rare, but had great potential for commercial value. This created the fundamental opportunity for Zenyatta and defines our mission today – to be a leading global supplier of high purity carbon and graphene.
The PEA in 2015 identified the potential value of the Albany high purity carbon. Since then the company has spent an incredible amount of effort in developing and testing the metallurgical flow sheet and market/business development. The results of this work to date are positive and indicate that the Albany graphite can be processed and purified for a number of potential market specifications - each with potentially different processes, cost and pricing yet to be fully defined.
Determining final markets, especially related to graphene has been changing based on feedback from our various collaborators in 2017. We now believe that our Albany graphite is the best carbon pre-cursor material in the world to create graphene from. The commercial future of graphene is in its infancy but the potential wealth created by being one of the world’s leading suppliers of this extraordinary material is extremely attractive. Our business plan is designed to manage the complexity of the target markets by
keeping the high purity carbon and graphene on separate development tracks, until it lowers our risks to join them.
To this end Zenyatta will complete our PFS on the production and sale of high purity carbon from the Albany resource. Separate from this we will begin the scoping work to prove our ability to produce low cost, commercial quantities of high quality graphene. We will work both materials to develop market channels, strategic partners, commercial agreements, collaborative research and IP.
In summary our strategy is to focus the advancement of the Albany resource based on the more mature high purity carbon market (lower risk) but embed the optionality of the future graphene market into our business (higher potential returns). Ideally manage the risk of being unique but capturing all of the upside of that same uniqueness.
Today Zenyatta is a pre-revenue, single asset, publicly traded junior development company. We need access to good capital from a key strategic partner for the next several years. This process is underway with several discussions. We are committed to managing the company, through the adaption of best practices, in a manner that will attract and sustain good strategic investment. True strategic partners can reduce the risks of our unique materials by providing long term capital under fair terms, market insights and technical specifications and critical off-take agreements. A good strategic financing will create value. Strategic financings at this level can take several months to complete. It is our hope that our next financing will effectively be a bridge for 2018, allowing us to advance our critical business plan objectives, so that we can complete a strategic financing in early 2019.
On behalf of the Board of Directors, Thank you.
Keith Morrison, Chairman
Zenyatta Ventures Ltd.