MRL Corporation (ASX: MRF) should trade higher today after measuring greater than 85% total graphitic carbon (TCG) results from unprocessed, remnant graphite stockpiles at its Sri Lankan graphite projects.
Work continues at the Pandeniya Priority 1 area with the rehabilitation of the first adit now nearly completed.
Importation of electromagnetic testing equipment is being finalised, and work should start in the next 10 days; results of this work will provide information for the best drill hole locations.
As previously advised, many old workings and remnant graphite stockpiles dating back 50 years are present since they were within the Priority 1 area.
Results received via XRF and ICP have been consistent under both methods and show the unprocessed remnant low grade samples contained around 85%, which was matched when tested for Loss on Ignition.
The initial results are significant and confirm the high quality of MRL's Sri Lankan graphite.
Further testing will be undertaken by Nagrom on remnant graphite samples to establish the metallurgical process required to further upgrade the TGC content of the material to above 85%.
Drill core samples of high grade graphite grading 95% TGC will also be tested to establish the most efficient processing route.
Sri Lankan Graphite
Lump or Vein graphite is considered to be one of the rarest, commercially valuable, and highest quality types of natural graphite.
It occurs in veins along intrusive contacts in solid lumps and is currently only actively mined in Sri Lanka, which is the only country that produces commercial quantities of high grade vein graphite with carbon content greater than 90% carbon as graphite.
As a result of the carbon content typically found within lump/vein graphite, production costs are normally lower than flake or amorphous graphite recovery.
First Mover Advantage
MRL has established "first mover" status in southern Sri Lanka, with four highly prospective lump/vein graphite development projects.
The company is establishing a major tenement position covering this type of graphite, which has effectively been pre-treated by nature to contain extremely high levels of carbon purity that attract premium pricing.
Current programs are focused along 650 metres of historic mine workings on the Pandeniya to Wallagala strike-line within the Warakapola Project.
MRL's Sri Lanka project work is not greenfield exploration; all projects areas have extensive historical workings and remnant graphite.
MRL's strategy is to convert at least one license to a Mining Licence within the next 12 months.
On a range of metrics MRL is compelling.
Potential production of 5,000tpa of premium quality vein graphite should generate revenues of approximately of US$10m pa. Capex to achieve this would be <US$5m and operating costs would be US$600-650/tonne.
Most other potential producers have CAPEX of between $30m to $133m.
Earlier in the month Proactive Investors put a Speculative Buy on MRL Corporation when its shares were trading at $0.03, with a valuation of $0.09 to $0.10 on the stock due to early production potential.
MRL Corporation last traded at $0.055, and is therefore up 83% since we rated the company a Speculative Buy.
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