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Energizer Resources enters joint venture to explore minerals in Madagascar

Published: 19:06 05 Oct 2011 BST

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Energizer Resources (TSE:EGZ)(OTCBB:ENZR) announced Wednesday it signed an agreement to enter into a joint venture with Australia-based Malagasy Minerals (ASX:MGY), forming a company that will look for a defined group of 27 industrial minerals, with a special focus on vanadium.

The joint venture company, in which Energizer will have a 75% interest, with Malagasy holding the remaining 25% interest, will focus its exploration on a newly expanded land position. The land covers 827.7 square kilometres throughout 2,119 claims.

Malagasy has a highly prospective land portfolio adjacent to the south and east of Energizer's Green Giant vanadium property. While delineating the Green Giant resource for its current NI 43-101 estimate, Energizer noted that the main vanadium trend extended beyond the south boundary of its deposit. Malagasy has confirmed that extensive vanadium mineralization exists on its own property, located in an area immediately to the south of Green Giant.

Energizer CEO, Kirk McKinnon said: "With the very significant Malagasy land position, we have now secured a new source of vanadium along with the high potential of discovering other strategic minerals. With Malagasy as a partner, who has a well-established tenure in Madagascar, Energizer is well-positioned to build on its exploration success."

Under the terms of the agreement, Malagasy will maintain a free carried interest in the joint venture until Energizer delivers a Bankable Feasibility study, at which point Malagasy will be required to contribute to the development of the property.

Energizer, which will manage all operations undertaken by the joint venture, will pay Malagasy a $250,000 deposit, as well as $2.0 million in cash and 7.5 million shares of its common stock upon the signing of a definitive agreement.

In Toronto, Energizer shares rose 2.5% to trade at $0.205 as of 12:31 pm EDT.

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