The following is an extract from the report.
Triton Minerals (TON) is a graphite explorer/developer with projects in Mozambique.
Its flagship asset is its 60% interest (earning up to 80%) in Balama North. This project is only 3km from Syrah's world class Balama resource.
Earlier this year TON announced a maiden JORC inferred resource of 103Mt for Cobra Plains deposit in Balama North, with grade 5.52% for 5.72Mt contained graphitic carbon.
In terms of amount of contained graphitic carbon, we estimate the deposit ranks 5th in size globally. The resource envelope is ca. 5km long, 400m wide, and 150m depth with only 0-3m overburden. This points to a low strip ratio should it be mined.
However significant upside exists. Drill results outside the resource - on the adjacent Nicanda Hill deposit - have been exciting (316m intersection and 750m width), and indicate the Balama North strike to be at least 7km, with TON estimating 10km.
TON have also identified graphite in an 8km zone (Charmers and Black Hills) nearby Cobra Plains and Nicanda Hill.
Using the drill results outside the resource, as well as results from trenching, mapping, and sampling, TON and consultant Optiro have identified a cumulative exploration target of 760Mt to 1,290Mt at Balama North in addition to the JORC.
If TON were to eventually measure a resource at the upper end of the target, it would be comparable in scale to Syrah's Balama.
The company is aiming for a resource update in 1QCY2015. Further work this year comprises more drilling and metallurgical work. A scoping study is aimed to be concluded in July which should put some approximate economics around the current resource.
Metallurgy is in early stages and preliminary results only on Cobra Plains suggest a crush, grind, and flotation circuit can be effective with total carbon (TC) recovery of 96%, and total graphitic carbon (NYSEMKT:TGC) of concentrate 94.5%.
30% of mass recovered is fine-to-coarse flake size (>75micron). However TON has noted that from sampling at Nicanda Hill that flake size seems coarser than Cobra Plains, with very coarse size (>500 microns) recorded. Further work is required to clarify flake distribution at Balama North.
Infrastructure is supportive. Balama North is adjacent to a main highway (which also runs past Syrah's deposit) that runs 230km to the deep water port at Pemba.
We recommend TON as a Spec Buy. We see four key catalysts:
1) Additional resource delineation, especially at Nicanda Hill;
2) Potential enhancement of grade and/or flake size of Balama North;
3) More metallurgical test results including at Nicanda Hill; and
4) Positive scoping study results. These have the potential to further re-rate the shareprice.
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