Financial Press: The Zen Effect:
Cavan Ventures Acquires Hydrothermal Graphite Acreage Next to Zenyatta
Just one day after another company saw a massive surge in trading volume due to announcing new graphite acreage in the same region, Cavan Ventures [CVN – TSX.V] is doing the same thing. Contiguous to the east side of Zenyatta Ventures’ [ZEN – TSX.V] Albany graphite deposit, Cavan’s new 100%-owned CAGE acquisition consists of approximately 760 hectares (1,878 acres) of land containing hydrothermal graphite.
Yesterday similar news came from Brookemont Capital [BKT – TSX.V], which announced the acquisition of approximately 417 hectares (1,030 acres) next to Zenyatta’s Albany project. The news resulted in a flurry of trading activity for Brookemont with over 11 million shares in volume, in stark contrast to the previous day’s 2,000 shares.
A similar reaction for Cavan could very well be expected. Not only does Cavan’s acquisition represent almost twice as much acreage, but the company’s total shares outstanding are almost a third less than Brookemont’s, while starting the day at a similar share price.
Focus should not be diverted from the news itself. Cavan already started the week by announcing it had more work to report on its Buckingham graphite project, however, this addition of Albany acreage trumps Monday’s news and has the markings of a true company maker.
“We’re approximately 6km away from Zenyatta’s deposit,” says Peter Swistak, President and CEO of Cavan Ventures. “An airborne survey was already conducted over our new property that showed both Zenyatta’s anomaly, and the same anomaly on ours as well.”
“We intend to get boots on the ground on this new property immediately, to start working the ground. This is an incredible addition to our company, there is no doubt about that.”
THE ZEN EFFECT
Zenyatta Ventures is currently trading over $3.20, whereas within the last year it saw values as low as $0.145. The reason for its current valuation is very clear: Zenyatta has some of the world’s highest purity graphite available, with a new mine on the horizon.
Unlike other high-purity graphite which often is created synthetically by the burning of petroleum, Zenyatta’s deposit (and subsequently now on Brookemont’s and Cavan’s as well) is natural occurring extremely high-purity graphite. Thus, once a new mine is built, Zenyatta will have the largest and only high-purity hydrothermal graphite mine in the world.
“We’re right in Zenyatta’s neighbourhood here,” says Swistak. “But what is most important for us, is that we’re going to work this property as soon as possible.”
The move by Cavan changes the landscape of their portfolio, as it adds even more acreage devoted to graphite, which is complimented also by a focus on rare earth elements (REEs) on its Pythonga project.
One running theme that works for both Pythonga, and this new Albany graphite acquisition, is the proximity to rapidly developing mines. On Pythonga, Cavan’s news stream benefits from its neighbors with Matamec Explorations [MAT – TSX.V], which is developing the Kipawa Mine with a subsidiary of Toyota. This new addition puts Cavan in good company once again.
“It’s a lovely situation we have here,” says Swistak. “Just as Matamec is in our neighborhood on Pythonga, we have a new powerhouse neighbor in Zenyatta. We see where they went and how they just keep on achieving new heights, so we’ll be encouraged by their persistence, and will counter with an aggressive exploration program of our own.”
THE NEW FACE OF CAVAN
Cavan already had a substantial graphite portfolio to be proud of, however, with the Albany acreage, the company seems to be moving to another level. Not shy about doing work on its properties, Cavan will continue to aggressively explore all five of its properties, rather than just focus on one.
The company showed already this week that it has done some very important work with its Buckingham graphite property, which returned optimistic grades. Swistak and his team expect similar optimism from this new acreage.
What the new acreage adds are some significant confidence factors that the market should see value in. Zenyatta has effectively led the charge in educating the public on the benefit of its high-purity hydrothermal graphite, so now the others following in their footsteps can focus on the task at hand by drilling their own properties out.
As well, the addition for Cavan could feasibly draw some of the shareholder base that were so successful with Zenyatta.
“If someone owns Zen, and they’re quite happy with it, those shareholders need only to sell 1,000 shares or so to grab up a healthy position in our company,” says Swistak. “It’s definitely a great entry point with a future that’s looking very bright. Any money that we raise here will obviously be put right back into the ground to get this work going.”
“Since there are already a lot of eyes on Zenyatta, we believe we will benefit from the enthusiasm.”
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