THUNDER BAY – Mining News – Zenyatta Ventures Ltd. (TSX VENTURE:ZEN) is pleased to announce that the Company has reached an agreement with Cliffs Natural Resources Exploration Canada Inc., an affiliate of Cliffs Natural Resources Inc. for the acquisition of 100% of the Albany graphite deposit. Zenyatta has recently exercised its right and acquired an 80% interest in a claim block (4F) by having spent $10 million on exploration over the last 2 years at the Albany project.
The Company has now acquired Cliffs’ remaining 20% interest (total of 100%) in the claim block referred to as 4F, which holds the Albany graphite deposit (“Block 4F Claims”). Pursuant to the terms of the transaction, Zenyatta and Cliffs agree to the following with respect to the Block 4F Claims:
a. Zenyatta will issue to Cliffs (or its designated affiliate) a total of 1,250,000 shares as follows: (i) 500,000 shares upon signing the agreement; (ii) 250,000 shares to be issued upon completion of a pre-feasibility study; and (iii) 500,000 shares to be issued upon completion of a feasibility study; and
b. Zenyatta will grant Cliffs a net smelter return royalty of 0.75% on the Block 4F Claims, of which 0.5% can be purchased at any time for $500,000.
Aubrey Eveleigh, President and CEO of Zenyatta, stated “This transaction is of strategic importance to our Company. We now own 100% of the Albany graphite deposit and, more importantly, have eliminated the back-in right that Cliffs held under the original agreement. This allows Zenyatta the liberty of negotiating with another party, especially an end user of graphite, at any time along the development path of our graphite deposit.”
Zenyatta is developing a rare ‘vein-type’ graphite deposit it discovered in 2011 in northeastern Ontario, Canada. It is the only and largest ‘vein type’ graphite deposit under development in the world. Recently, a first pass beneficiation test at SGS Canada Inc. (“Lakefield”) demonstrated a simple concentration and leaching process capable of producing a 97.2% C (total) graphite product from a rough concentrate. Mineralogical work shows the graphite material to be very simple and contains insignificant amounts of undesirable material. Work is on-going to target ultra-high purity levels of greater than 99.0% C with results from a second series of tests expected soon. The Albany deposit is located 30km north of the Trans Canada Highway, power line and natural gas pipeline near the communities of Constance Lake First Nation and Hearst. A rail line is located 70km away and an all-weather road approximately 4-5km from the graphite deposit. The deposit is near surface, underneath glacial till overburden.
Prior to the sale of the Block 4F Claims, the Albany Project was subject to an option and joint venture agreement between the parties dated November 2, 2010 (the “First Amended Albany Agreement”). This agreement is fully described in the prospectus of Zenyatta dated December 15, 2010 and filed on www.sedar.com.