Hi all, I shared this on SI but thought some of you may want to weigh in as well.

Mara phoned me today and I was able to have a 45 min. conversation with her.

My overall impressions haven’t changed an awful lot.  There are some potentially very positive aspects of ZEN and there is potentially a level of ambiguity that remains frustrating.

I had a list of questions that I had emailed to her and she answered most of them.  I didn’t take notes, but these are my recollections.

Mara stated that the recent drop of the share price was a surprise to the management.  One large share-holder decided to sell a large block and it just happened to correspond with the recent news.

We began by discussing why there was such ambiguous and uninspiring language in the press releases.  She stated that she is always trying to walk a balance between investors with more technical knowledge and perhaps more economic interests.

I suggested to her that using language like “reaching a grade of approximately 90%” does not help us significantly because the word “approximately” is such a vague word.  She stated the there is a range of recoveries that Mr. Jordan experienced and that there was a difference between the East and West Pipe in recovery rate due to the difference of graphite content in the ore.

Mr. Jordan designed his tests to produce graphite for lithium battery applications.  Mara stated that there would be less grinding required to produce graphite for graphene purposes and so that there would be a higher yield for a concentrate (ie. Greater than 90%) to be used for graphene.

I encouraged her to release the range of graphite production any way instead.  She stated that she will consider releasing the final metallurgical results in a full report as 43-101 document.  SGS is one of the delaying factors for the metallurgy.  Even after they have all of the data they can take up to 1 month to complete a report.  Therefore, even though the pilot scale should be done in May we may not receive news until the end of June.

Up until now, Government and the universities themselves seem to be paying for most of the studies.  Zenyatta has been responsible to prepare the samples which are still rather expensive.  However, waiting for the universities to provide results can be a slow process as well.  I didn’t ask specifically which universities are studying our graphite.  It was on my list of questions, but over my conversation I forgot to ask directly.  What I did ask Mara is to actually release the studies from the Universities on the web site so that we can comb through the information ourselves. 

I told her that I have questions that the reports would include such as “How much better is Zen graphite in producing graphene than other natural forms?”  Mara stated that sometimes it is hard to answer those questions, however, I told her that university studies would be analyzed against base line studies that should give us some clarity.  She would look into this and work on it.  I told her that providing this baseline information in the press releases is very important.  When we are told that ZEN can be converted to graphene at a higher rate (95%) than other natural forms of graphite tell us what those rates are.  We want to know that ZEN’s graphite is superior and by how much it is superior over other forms of flake and natural graphite. . .

We had a fairly long discussion about what exactly makes ZEN superior graphite to produce graphene and to be used in composites.  I explained that I would love clear answers and the studies must have shown this by now.  Is the advantage the purity?  The particle size?  The uniformity?  Mara mentioned the hydrophilic (water loving) nature of the particles (although she didn’t know the word for it).  I asked her what made the graphite hydrophilic?  Is it the shape, quality, size,  . . .  She would look into this.  I’m not sure that this is an issue for other people, however, I do have a background in chemical physics and I feel personally that knowing why the deposit is unique would increase my confidence in my investment.

Zen has chosen to focus on graphene composites (i.e. rubber, alumina, concrete).  I asked her to ensure that in every press release that the potential benefit of the composite be given with the actual results.  We have done this for concrete when we have been told that the admixture shortens cure rates, reduces the concrete used and makes the concrete stronger.  I told her that in one study they stated that alumina became many times more conductive of electric current.  I asked her why was this study important since this increase in conductivity would only make aluminum oxide (alumina) only conduct electricity at the same magnitude of sea water.  She stated that the financial post will have an article on Tuesday about graphene composites that might answer some of the questions I had.  Great.

I asked about the mining readiness study.  She stated that it wasn’t proceeding until the next phase of ZEN’s development.  I can’t remember if we are waiting for the metallurgy or if we are actually waiting for a completed PFS although I believe it was a completed PFS.  What this told me is that this mining readiness study is only to assist Hearst and Constance Lake be equipped for a successful ZEN mine and actually might be a significant benefit for ZEN to ensure that the local resources are deployed well.

ZEN has signed about 40 NDA’s.  About half a dozen have chosen not to pursue further testing with ZEN for a variety of reasons.  None that Mara knows were the result of poor performance.

The PFS and first phase of the environmental studies will cost about $3mill in total and will take 8 months to a year to complete.

The reason for not starting a PFS or environmental yet are the following:  #1  some of the work depends on the results of the metallurgy and so unless we wait we might have to redo certain parts.  #2  to conserve cash and #3 due to a lack of vision or clarity about the future of ZEN’s deposit.

We are being tested for a silicon graphene battery by a US company.  This same company was studying ZEN to be used in their lithium ion battery, however technology is changing.  Mara cannot disclose the name, however she hopes to provide a press release about it in the near future if she can state something meaningful without compromising the NDA.  This does sound like TESLA, but this likely sounds like any other battery maker as well.

We should hear an update about concrete soonish.

The final paragraph is my opinion and not Mara’s

                I believe our management was very much over their heads with the ZEN discovery.  It has taken them a long time to understand the deposit and to know what to do with it.  It is very likely that their mining backgrounds and geological backgrounds did not equip them to engage in the high tech industry.  As a result they have been on a learning curve for at least a couple of years.  Perhaps their caution will end up producing greater results as we are transforming into a graphene composite company, however, this really has only happened through accident and not by their design. 

                Our management is just now beginning to have a clearer vision about ZEN.  Much of the delays we are facing is because our management hasn’t known what to do and has followed the pathways of the research community which is never efficient or clear.  I might even suggest that it is possible that some on our forum might have a greater understanding of ZEN then certain directors which is why our board and management do not invest in ZEN outside of Aubrey.  I suggested to Mara that we would be well served to choose three high valued industrial uses and aggressively market and pursue business partnership with industry leaders.  She agreed and stated that the management is just now coming into that kind of focus.

                So my overall impressions from my conversation led me to be positive on the ZEN deposit, yet to be uninspired by our actual management and communications.  I would not invest in ZEN because of the current management.  I am investing in ZEN because I believe that the product will end up overcoming any deficiencies in our management.