Zenyatta Announces Positive Preliminary Economic Assessment for Albany Graphite Project

Thunder Bay, ON

1 June 2015

Zenyatta Ventures Ltd. (“Zenyatta” or “Company”) (TSXV : ZEN) is pleased to announce the results of a positive preliminary economic assessment (‘PEA’) on its Albany hydrothermal Graphite Project located in northern Ontario, Canada. The PEA was prepared by the independent engineering firm RPA Inc. (‘RPA’) in Toronto with mill design input from SGS Canada Inc. (‘SGS’). The RPA report concluded that the PEA is positive and the project should be advanced to the pre-feasibility stage. An animated video of the proposed mining project can be found on the Zenyatta website or at the following LINK.

PEA Highlights: (Note: All dollar amounts in US currency unless otherwise specified)

• Open-Pit, Life of Mine (‘LOM’) of 22 years based on less than 50% of the Indicated & Inferred Mineral Resources. Underground mining of Inferred Resources below the sill are not included in this study. The deposit is open at depth;

• 3,000 tonne per day open-pit mine and process plant to produce 30,000 tonnes of high purity (>99.9% Cg) graphite annually;

• Price of purified graphite @ $7,500 per tonne and operating costs of $2,046 per tonne showing a margin of $5,454 per tonne;

• Total LOM gross revenue of ~$4.8 Billion and an after-tax cash average annual cash flow of $110 Million;

• A base case after-tax Net Present Value at a 10% discount rate of $438 Million yielding an after-tax Internal Rate of Return of 24%.

RPA proposes a 22 year, open-pit mine with a processing plant located on site which generates a strong annual cash-flow and high rate of return. The PEA indicates that the Albany graphite project has excellent potential to be a low-cost source of high purity graphite without the use of dangerous and environmentally harmful hydrofluoric acid (as in China) or costly thermal upgrading (as in synthetic graphite derived from petroleum coke). Recent work performed by SGS, on behalf of Zenyatta, successfully completed and tested an innovative and relatively benign purification process for the production of consistent and highly crystalline graphite exceeding 99.9% purity from the Albany deposit. Feedback from the cleantech sector suggests that environmental considerations are critical when sourcing raw materials for today’s high tech applications like energy storage. Supply chain transparency is easier to track and is expected in an ever demanding ‘green’ world.

The PEA is based on mineral resources that are not mineral reserves and have not demonstrated economic viability. Thus, there is no certainty that the results of this PEA will be realized.

OPERATING (US$)

It is common practice in the mining industry to assess the economic viability of a mineral project at various development stages. Generally, a mining company will first conduct a PEA, then a pre-feasibility study followed by a feasibility study. Each stage will analyze, in further detail and to a greater level of certainty, the economic, technical and geological factors that will determine whether the mining project is commercially viable. The goal of a PEA is to determine, at an early stage, whether a mining project is potentially viable, in order to advance to a pre-feasibility phase.

CASH FLOW (LOM- US$)

Aubrey Eveleigh, President & CEO at Zenyatta commented, “The Company is exceptionally pleased with the strong PEA results presented by RPA and will now proceed to a pre-feasibility stage where further project definition and optimization is expected. This is a very important milestone for Zenyatta that started with the discovery of a rare graphite deposit in 2011 and has now gained global recognition for its unique purity and crystallinity. Zenyatta’s early stage study has resulted in extremely encouraging economics that will support discussions with potential strategic partners and financiers.”

CAPITAL COST (US$)

Zenyatta’s 100% owned Albany graphite deposit is located in northern Ontario, Canada near good infrastructure. The deposit is located 30 km north of the Trans-Canada Highway (‘TCH’), with access to the power line and natural gas pipeline near the communities of Constance Lake First Nation and Hearst. A rail line is located 70 km away, with an all-weather (all season) logging road approximately 20 km from the graphite deposit.

The PEA proposes building an access road, power line and gas line to the property from near the TCH. Planned infrastructure and facilities at the project site include the open-pit mine, processing plant, tailings management facility, handling facilities, crushers and secondary buildings, including offices and workshops.

PROJECT ECONOMICS (US$)

The pricing model for the PEA was derived from an extensive detailed study of targeted market segments and industry trends that are relevant for the high-quality and high-purity graphite sector. A summary of approximate price ranges for these market segments of the graphite industry are shown here for reference. Estimated annual production of 30,000 tonnes of high-quality graphite product from the Albany deposit represents ~7% of the 2017 market demand estimate.

High Purity Graphite Market

Zenyatta Ventures Ltd. – Albany Project

Sources and Notes:

1. 1. Includes lithium-ion and additives for primary and secondary batteries. Source: Roskill and BCC Research
2. 2. Source: Roskill and end-user data provided to Zenyatta market development personnel under a confidentiality agreement
3. 3. Source: Roskill, BCC Research
4. 4. Volume includes only high purity (>99.9% Cg) graphite. Source: Roskill

Zenyatta has previously reported that preliminary testing has indicated that the performance of Albany graphite is within the range of anode materials that are presently used for Lithium-ion Batteries (‘LIBs’). Independent testing has also indicated that it is suitable for use in hydrogen fuel cells and in powder metallurgy (‘PM’) applications. At this time Zenyatta anticipates having a targeted market application segmentation which includes 25-30% in LIBs, 20-25% for Fuel Cell products, 25-30% for high purity graphite in PM and 15-30% from other applications in the list above. The Company is in discussion with end-users on other types of high purity applications that could possibly change the market segmentation and will disclose these potential markets at the appropriate time.

The outlook for the global graphite market is very promising with demand growing rapidly from new applications. Graphite is now considered one of the more strategic elements by many leading industrial nations, particularly for its growing importance in high technology manufacturing and in the emerging "green" industries such as components of energy storage devices for electric vehicles, computers, smartphones etc. The applications for graphitic material are constantly evolving due to its unique chemical, electrical and thermal properties. It maintains its stability and strength under temperatures in excess of 3,000°C and is very resistant to chemical corrosion. It is also one of the lightest of all reinforcing elements and has high natural lubricating abilities. Some of these key physical and chemical properties make it critical to modern industry.

This News Release describes a PEA cash flow model based upon geological, engineering, technical and cost inputs developed by RPA. A National Instrument 43-101 PEA technical report will be filed on SEDAR and made available on the Company’s website within 45 days. Jason Cox, P.Eng. Executive VP – Mine Engineering - Principal Mining Engineer of RPA, Alex Mezei, M.Sc., P.Eng., Director, Engineering Technical Services at SGS Lakefield, independent consultants to Zenyatta, Peter Wood, P.Eng., P.Geo., VP Exploration and Dr. Bharat Chahar, P.E., VP Market Development for Zenyatta are the Qualified Persons under National Instrument 43-101. Jason Cox, Alex Mezei, Peter Wood and Bharat Chahar have supervised, approved and read the scientific and technical information that forms the basis for the disclosure contained in this news release. To find out more on Zenyatta Ventures Ltd., please visit the website www.zenyatta.ca or contact the Company at info@zenyatta.ca or Tel. 807-346-1660.