Chris Berry with the Uber Hot Daniela Cambone (Kitco)

Chris Berry locks eyes and smiles with the Uber hot Daniela Cambone (Kitco)

Discovery Investing's Chris Berry has just published commentary on Zenyatta Ventures (TSXV:ZEN) after a site visit to the company's much hyped Albany graphite project in Ontario.

In short Berry recommends the company raise as much capital as possible at current prices, while at the same time advising his readers to steer clear of the company for now, saying Zenyatta has been "Priced to perfection" and could "Underwhelm" investors with future results.

Mr. Berry commented, "ZEN is an eventual take out candidate if the company can prove out the deposit and also prove that caustic bake can be executed successfully on a large scale. That said, I view it as unlikely that a potential suitor will emerge anytime soon. ZEN’s current market cap of $216,000,000 would need to be swallowed along with the eventual capital expenditure to build a producing mine at Albany. I assume a cap ex of $175,000,000. Add to this a 20% takeout premium for ZEN shareholders and the total cost is approaching $440,000,000. Recent statements from companies like GrafTech or SGL Carbon lead me to believe that they are retrenching rather than considering acquisitions."

Here's a link to the full site visit report. Readers are also encouraged to subscribe to Mr. Berry's free Discovery Investing Morning Notes newsletter, which he pens with his father, Dr. Michael Berry. Sign up here.

Here's the 12 month ZEN chart:

Hist (9)

(Stockwatch)

Do your own due diligence.