I got to chat with the company and wanted to share some of that conversation here. I know it is frustrating waiting for news and seeing the share price slide but we have to keep our eyes on the prize. Here are some of the discussion point I had that may help with staying focused.

My first question was concerning the processing of the graphite. We were originally told that it was an off the shelf process and in the June release were told the following:

"We expect to develop a distinctive process for this graphite deposit."

How could both statements be accurate? Well, I was explained that the floatation and the caustic bake are both off the shelf treatment, what is unique is that SGS is now able to combine these 2 separate steps into one step. No one has ever been able to produce 99.9+% pure graphite by combining these 2 methods. This is the distinctive part.

My interpretation of that is ZEN will be able to shave a few dollars here by having a combined process, but that still need to be demonstrated.

I was explained that they have signed a few more NDAs since they announced the 20 they already had in June. These companies are all multinational corporations and want samples of our graphite. They also all have their own requirements or specifications for the graphite and this is what has kept ZEN and SGS so busy. They do not know which of these companies will be willing to pay the most so ZEN and SGS are working hard to make sure that all of these companies have samples that meet their requirements. A pure guess here would be that ZEN has to prepare 30-40 different standards of graphite and that takes time and why we are still waiting.

An update is coming I was told but 3rd party info is required so difficult to gauge timing here. My personal guess would be next week as we will be into September and most eyes will be back to work.

The current MC is under $120M for a company that, at $8500 per ton sells, $2k per ton costs and 50 ton per year would generate earnings of $325M per year. All these numbers are reasonable IMO and could be higher. The current NPV at 10% is still around $2B. It would jump to $5B if we get the $14k per ton that was mentionned at the PDAC. There is a safe upside from buying here IMO and that upside could be 1000% or more for those patient enough for a buy out or production.

Hope this helps everyone hold or accumulate during these dog days of summer...September is next week and so probably is our next NR.

Glorieux