The Long Shot | Energizer Resources Inc. (ENZR)

With the never ending boom in the need for Lithium-Ion batteries, development stage graphite miners, Energizer Resources Inc. (OTCQX: ENZR) would appear to be on the cusp of becoming a player in the industry. Having last issued a corporate update in March regarding their Molo Graphite Project NI 43-101 feasibility studies and the progress which had taken place, shares of ENZR have been getting some action recently as they continue to set new 52WK lows ($0.0687 set yesterday). The recent activity which has triggered volume alerts for a number of screeners who seek activity like this, a rebound, although a small one at best, could be something worth flipping a buck or two for.

 

ENZR Chart

 

Energizer Resources has a couple of properties in Madagascar and one in Quebec that they have been financing deals to acquire portions of before acquiring all of for the better part of a decade now, all the while having to issue more shares to do. With accumulated losses of $92,243,250 built up as of March 31, 2015, the recent round of financing, 30,201,497 common shares and 10,067,166 warrants sustained a month of acceptance by investors before ENZR shares, the last month or so, left the near $0.10 range to slide over the last few weeks with the last 5 sessions being the steepest decline.

A couple of years ago, the mindset was that as soon as consumers make the transition from fuel-burning vehicles to electric ones, the massive demand for lithium batteries would make investors millionaires by owning shares in the companies that mine for the rare earth element. It’s now the middle of 2015 and, other than the tree-hugger or the robot loving self-driving car enthusiast, the futuristic switch with its blue sky potential seems to be a dream concept, especially with oil prices looking to stay at around $50 per barrel for the foreseeable future.

There is the more real sector of the market which is cellphones, laptops, and other electronic devices demand for the long-lasting battery power which originates from lithium-ion batteries. This, in a big picture, would appear to be a no-brainer since the battery manufacturers and developers must first get the raw material making ENZR and their efforts to acquire all of the testing results and mining resources (permits, equipment, etc.) a strong possible player once they are able to move forward with a project.

According to the March update about their Madagascar project, it looks like ENZR is prepared to do such. The Company stated that mining permits were being acquired, discussions with potential strategic partners were being conducted and, the evidence of a massive financing deal were announced; raising approximately C$2.5 million. Does this ultimately mean that the recent continued decline is investors giving up on their long holds or is it a pressured move to allow for cheapies to be accumulated?

While there has never been a time when shares of ENZR could be bought for such a cheap price (at least in the last 5 years), is the stop, drop and roll decline over yet? In mid-November of 2014, shares dropped for over a month after a recent run at the start of the month and just two months after a 3 day run in September, 2014 whereby shares rose over 100% to $0.278 while recording the three highest volume trading sessions in the past 5 years.

Lithium may very well be in high demand, especially as people continue to be prescribed it as a treatment for bipolar disorder. Although these last couple of trading sessions are only a fraction in regards to the volume spikes from 10 months ago, these new lows for ENZR shares are gaining the attention of some who think a rebound is as inevitable as the actual product coming out of the ground in a remote part of Madagascar.

 

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