MRL Corporation's (ASX:MRF) maiden drilling program in Sri Lanka is off to a promising start with the first drill hole intersecting one high grade graphite vein and a second sub-parallel graphite vein.
The company holds 6,300 hectares of Exploration Licenses that could potentially produce 5,000 tonnes per annum of vein graphite.
Structural data from drill hole DH1 at the Bopitiya / Pandeniya priority location will be evaluated to determine the next drill location and orientation, to better intersect the graphite veins.
Training of geology crews in the use of downhole survey and orientation equipment is complete and DH1 will be surveyed in coming days prior to commencing drilling at DH4.
Select drillholes will be cased with PVC casing to maintain access to the drillholes for potential downhole geophysics surveys.
"The outstanding high-grade graphite intersections encountered in our first exploration hole is a validation of the company's methodical exploration approach," managing director Craig McGuckin said.
"The Directors of MRL are excited by this initial result and anticipate further positive results as the drilling program continues."
Half-core intersections of Vein Graphite will be submitted for analysis to Nagrom laboratories in Perth, Western Australia.
Drill hole DH1 intersected one high grade graphite vein and a second sub-parallel graphite vein:
Intersection 1 from 91.62 metres to 92.32 metres comprises downhole graphite vein intercept of 0.69 metres, with a true thickness of about 0.25 metres to 0.3 metres.
Intersection 2 from 97 metres to 97.9 metres comprises downhole graphite vein intercept of 0.90 metres although coring appears to follow the vein contact, skimming the margin of a sub-vertical graphite vein.
This vein is orientated roughly sub-parallel to the first intercept.
MRL Corporation has over 6,300 hectares of Exploration Licences that contain more than 200 historical adits and shafts.
These also host a large quantity of remnant graphite dumps, indicating that a reasonably large volume of vein graphite was produced from numerous artisanal pits during the 1890's to 1950's.
However, these historical workings are relatively shallow given the limited ventilation and dewatering capabilities of artisanal miners.
This is notable given that graphite vein mineralisation is expected to remain open below the surface of historical shafts.
In addition, no systematic modern exploration for vein graphite has been undertaken on MRL licences.
MRL expects exploration and development to be low cost along with opex and capex.
It has completed initial adit underground safety training as well as ventilation, electrical and land access.
Work is underway on the Pandeniya Priority 1 shaft.
Sri Lankan graphite
Sri Lanka is renowned the world over for being the only producer of crystalline vein or lump graphite, which is the highest quality of naturally occurring material.
The quality of vein graphite produced in Sri Lanka has a purity level in excess of 90% Carbon as Graphite.
This is significant as it requires very little upgrading and processing to produce a high quality saleable product, leading to low operating costs and high profit margins.
MRL has successfully produced concentrate grading 95.4% total graphitic carbon from the first round of testing with a single stage flotation.
The intersection of high grade vein graphite at the first hole of its initial drilling program in Sri Lanka is a validation of MRL Corporation's exploration program.
Data will help to further refine its drilling program to test the vein graphite potential of its exploration licences, which have historically produced large volumes of vein graphite from numerous artisanal pits.
Proactive Investors expects shares in MRL to open firmer on the news.
There are also a number of catalysts ahead that could drive further share price growth:
- Further drilling results;
- Results from downhole surveying;
- Refurbishment of existing artisanal workings for exploration;
- Detailed mapping of graphite vein structure & geophysical results;
- Near term production potential from historical workings; and
- Potential for additional licences.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.