Metals of Africa (ASX:MTA) has extended due diligence on the Balama Central Project in the world class Cabo Delgado Graphite Province in Mozambique by six weeks to allow the flying airborne electromagnetic (VTEM) survey.
As a hint of its potential, the project is located along strike and immediately adjacent to Syrah Resources' (ASX:SYR) Balama Graphite Project - the world's largest graphite resource of 1.15 billion tonnes at 10.2% total graphitic content.
Subject to successful completion of final due diligence, Metals of Africa plans to complete the acquisition of the Balama Central Project (Licence 4118) and commence exploration immediately.
Consideration terms are a mixture of cash and shares.
The company has also started detailed geological mapping and trenching at Balama Central to define drill hole locations over the existing 10 kilometre long VTEM graphitic anomaly.
At the Montepuez Graphite Project, it is due to start its VTEM survey after it was delayed due to technical problems with the contractor's electromagnetic transmitting.
This has since been rectified and the equipment is operational.
Montepuez comprises the 5572L, 6216L and 6172 licences, the first two of which are on strike from Syrah's Balama Graphite Project and Triton Mineral's (ASX:TON) Balama North Graphite Project.
The company had in September received strong investor support for its graphite and zinc exploration programs, raising $5.063 million through a placement and rights issue.
Balama Central Project
Metals of Africa had in August entered into a binding License Sales Agreement with Mozambican registered company, Dombeya Mineraco Lda (Dombeya), to acquire of the Balama Central Project subject to successful completion of due diligence.
Balama Central, which covers 9,600 hectares, has not being subject to any previous systematic or on the ground exploration.
The project area has been subject to country wide regional geological mapping plus government airborne geophysics surveys flown over the region, which produced magnetics and radiometric data.
Desktop appraisals of the results of this broad scale regional exploration conducted to date has concluded that the project area is prospective for graphite on the basis of the prospective geology mapped and airborne magnetic signature.
About 70% of the licence is mapped to contain the regions prospective geological unit - X3Pqm, a graphite bearing quartz mica gneiss and schist.
The project boasts excellent logistics, with a main road passing through the middle of the license.
Key terms of the revised acquisition agreement are:
- On the Signature Date (21 August 2014) the Buyer will pay the Seller a payment of US$50,000 as the first part payment for transfer of the Licence;
- On the Completion Date (on or before 13 November 2014) the Buyer will issue to the Seller or its nominee such number of fully paid ordinary shares in the Buyer (Consideration Shares) as would have a market value of US$200,000 based on certain conditions; and
- On the Completion Date the Buyer will pay the Seller US$200,000 as the third and final payment for transfer of the Licence.
Other Projects
At the Rio Mazoe and Changara Base Metal Project in Mozambique, the company is continuing ground geophysics and geological surface advancement.
An exploration camp to support the drill program has been established and the main access tracks have been created.
Drilling remains on track to commence in late October to test the most compelling of the 39 zinc‐copper‐lead geochemical and geophysical anomalies the Company has identified.
Meanwhile, Metals of Africa is conducting geological mapping and surface sampling at its Kroussou Base Metal Project in Gabon.
This is designed to verify the historical BRGM zinc‐lead‐silver‐copper data for this project. This field work is anticipated to take another month, with laboratory assay results anticipated toward the end of the year.
Analysis
Metals of Africa's Balama Central Project extends its graphite portfolio that is along strike from Syrah's monster Balama Graphite Project.
The six week extension to due diligence will allow the company to carry out the VTEM survey that will firm up its confidence before acquiring the project.
Along with the Montepuez Graphite Project, it has the opportunity to explore along side and along strike from Syrah's Balama Graphite Project and Triton's Balama North Graphite Project, both of which hosts major graphite resources.
The projects all share the same geology, which further de-risks its projects.
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