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Metals Of Africa Wraps Up Control Of Balama Central Graphite Project

Metals of Africa (ASX:MTA) has moved quickly to wrap up 100% of the key Balama Central Graphite Project in Mozambique in a province which has borne large fruit with Syrah Resources' (ASX:SYR) major Balama Graphite discovery.

A recent VTEM survey flown over the Balama Central Project produced encouraging results which indicate a conductive anomaly of 3 kilometres long by 1 kilometre wide.

Significantly, this is coincident with the strike of stratigraphic conductors hosting the mineralisation at Syrah's project area.

Balama Central Project is located along strike and immediately adjacent to Syrah Project which hosts one of the world's largest graphite resources, of 1.15 billion tonnes at 10.2% Total Graphitic Carbon (NYSEMKT:TGC) and 0.23% Vanadium Oxide (V2O5).

The acquisition will expand the company's project area in the Cabo Delgado province and complements its other graphite projects in Mozambique.

Acquisition terms appear very reasonable:

- Total of US$250,000 (US$50,000 first cash payment + US$200,000 second cash payment).
- On the Completion Date the Buyer will issue to the Seller paid ordinary shares at a market value of US$200,000 based on certain conditions.

Cherie Leeden, managing director, commented: "Our VTEM survey has revealed a conductor of considerable dimensions within our recently acquired license, along strike of one of the world's most valuable graphite deposits.

"We will now design a drill program based on the VTEM data and will obtain the standard regulatory approvals required to commence drilling of the conductor after the current wet season."

Balama Central Project well-supported by logistics

The Balama Central Project comprises a surface area of 9600 hectares, and is supported by a main road passing through the middle of the license.

Adding to the logistics is the town of Balama, which is located in the centre of the license.

The town is well removed from the VTEM anomaly and main graphite target, and will serve as a convenient base and source of local labour.

Analysis

The acquisition of Balama Central has the potential to position Metals of Africa for a significant re-rating.

The reason is exploration to date shows potential for a discovery similar to that by Syrah Resources ($616 million market cap.).

A VTEM survey at Balama Central indicated a 3 kilometre strike extension of Syrah's Balama deposit into the Balama Central Project.

Significantly, this is coincident with the strike of stratigraphic conductors hosting the mineralisation at Syrah's project area.

Highly anticipated drilling is planned to commence at the Balama Central EM target in Q2, 2015.

With Metals of Africa having a circa $8 million market cap., it provides an intriguing vehicle into an emerging world class graphite and vanadium province.

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