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MRL Corporation Looks To Produce High-Grade Graphite In September Quarter

MRL Corporation (ASX:MRF) continues to rapidly advance its high grade graphite interests in Sri Lanka, with the company on track to begin production in the September quarter 2015 from its Aluketiya project.

Discussions with potential offtake parties for planned production are continuing.

An Industrial Mining Licence was issued to MRL Corporation for the project in November 2014.

Aluketiya will be an underground mining operation to extract high-grade, crystalline vein graphite, the purest form of graphite with TGC grades typically >90% TGC.

This focus is expected to drastically lowers capex and opex. It also grants the company the potential to sell run of mine.

Highlighting the prospectivity of Aluketiya, drilling assays returned Total Graphitic Carbon (NYSEMKT:TGC) grades of up to 99.3%.

The company will also continue with rehabilitation and construction work on two historic shafts at Aluketiya, which is set to commence in March and take two months to complete.

Additionally, a diamond drill rig is on site and is commencing a three-hole program with the aim of establishing the presence of further graphite mineralisation and sterilising other areas.

Craig McGuckin, managing director, commented:

"The December Quarter has seen significant progress, with the acquisition of an Industrial Mining Licence and commencement of head frame construction as the company continues toward its strategic target of being a producer of high-grade Sri Lankan graphite in the foreseeable future."

Sri Lanka is famed for being the only commercial producer of crystalline vein graphite and is among the highest quality of naturally occurring material in the world.

Typical high-grade Sri Lankan graphite achieves a greater recovery rate than most disseminated flake graphite deposits due to its reduced physical processing requirement and much higher starting TGC purity.

Metallurgical Test Work

During the December quarter metallurgical test work was conducted at Nagrom in Perth and Wuhan University of Technology (WUT) in China during the.

Testing conducted at WUT found graphite from Aluketiya contained 99.98% TGC.

Testing is ongoing with a view to simplifying the metallurgical flow sheet and achieving grade of at least 99.95% TGC though acid leaching techniques.

Upcoming price catalysts in March quarter

- Completing the construction of the Pandeniya EL228 - S2 headframe and installation of the support equipment to enable underground access. The company also expects to receive its Industrial Mining Licence for this project.

- Commencing diamond core drilling at Aluketiya and starting the refurbishment of two shafts in the project area and construction of civil works and headframes.

- Further exploration work towards drill targets on the Pujapatiya project areas including further Land Access agreements.

- Further analytical testing by Wuhan University in China and Nagrom Metallurgical group to simplify the metallurgical flow sheet and achieve grade of at least 99.95% TGC though acid leaching techniques.

- Receipt of approvals form the Board of Investment of Sri Lanka on the company's Aluketiya project which will provide import and VAT concessions.

- Discussions with potential offtake parties for planned production.

Analysis

MRL Corporation is focussed on becoming a profitable high grade graphite producer.

The company is moving rapidly towards this goal considering key metallurgical test work has shown its graphite exceeds the grades required for use in lithium ion battery anodes.

Production from the Aluketiya project is on track for the September quarter 2014. Discussions with potential offtake parties remain a key near term focus for MRL.

The company had $1.2 million in cash at the end of December 2014.

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