Kibaran Resources' (ASX: KNL) recent reverse circulation drilling at the Epanko deposit of its Mahenge Graphite Project in Tanzania has confirmed substantial near-surface zones of high-grade, large flake mineralisation that remains open in all direction.
The assay results will be used to upgrade JORC Resources, which is currently 14.9 million tonnes at 10.5% total graphitic carbon in the Inferred category, to the Indicated and Measured categories.
Significant results from the assays include:
- 18 metres at 9.7% TGC from surface;
- 32 metres at 9.3% TGC from surface including 16 metres at 10.3% TGC;
- 16 metres at 10.3% TGC from surface;
- 56 metres at 8.8% TGC from surface including 25 metres at 10% TGC; and
- 78 metres at 8% TGC from surface including 42 metres at 10.2% TGC.
Assays for the graphite intersected in the drill holes that have contributed to a doubling in the strike length remain pending, however the mineralisation exhibits similar geological characteristics to the current assays received.
Drilling was focussed on shallow, highly-weathered soft graphite mineralisation as the liberation and preservation of graphite flake size due to processed graphite pricing being dependent on flake size distribution.
The substantial near-surface zones of high-grade, large flake mineralisation will have significant commercial competitive advantages.
Results for the remaining drill holes are expected over the coming month.
Work on the Resource upgrade is already underway and completion is expected mid-July. Subject to the upgrade, the Epanko Economic Scoping Study will be released.
The Epanko deposit has attracted a binding offtake and sales partnership agreement, which was advanced with the support of a development bank with the view for potential debt funding for the future development of the deposit.
Graphite market update - price increases likely
Mid-term pricing for premium quality large flake graphite is forecast to substantially increase, according to recent future price modelling by Toronto-based, independent research firm Stormcrow Capital.
Stormcrow has forecast pricing for Jumbo flake to increase to US$6,170 per tonne in 20201, a near three-fold jump on 2013 prices.
Kibaran has the one of the highest flake distribution amongst its peers, and supported by the binding offtake and sales agreement that was secured with a European Graphite Trader.
These latest drilling results continue the momentum building for Kibaran at Mahenge, and follows written confirmation from Richland Resources that it would accept the terms offered by Kibaran for the sole graphite rights to the historic Merelani graphite mine.
Despite Kibaran's outperforming share price this month - it has risen 50% from $0.12 on June 4th to $0.18 today - the company is still modestly valued at under $20 million.
There are significant catalysts and news flow ahead that could further boost its share price including:
- Upgrading the near surface portion of the existing JORC Inferred Mineral Resource of 14.9Mt at 10.5% TGC to the Indicated and Measured categories which is expected to be completed in mid-July;
- The subsequent release of the Epanko Economic Scoping Study; and
- Further assay results.
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