Graphite company Kibaran Resources (ASX:KNL) will turn the drill bit at its Epanko graphite deposit in Tanzania in early March as it looks to upgrade the existing resource as a basis for a feasibility study.
Epanko currently has an Inferred Mineral Resource Estimate of 14.9 million tonnes, grading 10.5% TGC, for 1.56 million tonnes of contained graphite.
Drilling will focus on two areas: along strike of the eastern zone drill holes - where shallow, thick, robust zones of high graphite mineralisation were identified - and within the western zone between existing drilling and where the Company reported its best trench result measuring 117m at 10.0% TGC.
Planned drilling will focus on the shallow oxidised material to a depth of between 50 and 100 metres.
The 100%-owned Epanko deposit is located within the Mahenge Graphite Project.
Benefits of drill program
Successfully upgrading the Inferred Resource to an Indicated/Measured classification will allow the company to report its 2013 Scoping Study findings and commence work on a feasibility study which will progress the project to a development decision.
Merelani-Arusha graphite project
In parallel with the Epanko drilling program, the company is visiting the historical Merelani Graphite Mine and processing plant this week with the aim of assessing the viability of recommencing graphite production.
This follows the recent signing of a Memorandum of Understanding with Richland Resources Limited for the Merelani assets
The project and development path is advanced as Kibaran secured a binding offtake agreement with a sophisticated European graphite trader for the Epanko Deposit.
With drilling slated to commence in early March, continues the strong news flow cycle for Kibaran.
The recently announced offtake agreement with the European graphite trader significantly de-risks development of Epanko, with cash flows from the contract to underwrite development funding.
The EGT also has the right to subscribe for 5 million shares in Kibaran at $0.10 per share to raise $500,000, and to maintain its equity level in future funding.
The recently completed Scoping Study was based on an annualised process rate of 200,000 tonnes of graphitic feedstock at a grade of 10.5% Total Graphitic Carbon.
This should produce approximately 20,000 tonnes of graphite concentrate each year, consisting of 21.6% large flake, 52.2% medium flake and 26.2% fines. Ongoing feasibility studies are now aimed at refining and upgrading this estimate.
Epanko has a current Inferred Resource of 14.9 million tonnes at 10.5% total graphitic carbon with metallurgy indicating the graphite to be large flake and expandable in nature.
Highlighting the potential to expand the resource, this covers just 20% of the project area.