Caula is proving to be a much-needed boon for beleaguered ruby miner Mustang Resources (ASX: MUS) with the project producing further wide, high-grade vanadium results in addition to the high-grade graphite.
Latest assays from drilling at Caula in Mozambique returned up to 1.02% vanadium and 24.2% total graphitic carbon (TGC).
Notable drill results were 22m grading 0.31% vanadium and 16.2% TGC from 17m including the 1.02% vanadium at 74m downhole and 24.2% TGC at 96m downhole.
According to Mustang, the results were from drill hole 014 which contained several mineralised zones extending over 126m. Across all the mineralised zones graphite averaged 13.7% TGC, while the median vanadium grade was 0.41%.
The company stated the results were “important because the significant widths and grades” indicated the project’s “strong” economics.
Initial metallurgical testing had focused on the graphite mineralisation, but with the discovery of high-grade vanadium, Mustang plans to publish a maiden vanadium resource in a few weeks’ time.
The company will then undertake feasibility studies as part of the company’s strategy to fast-track stage one development at the project and generate cash flow from trial mining by the end of the first half of next year.
“Caula was already emerging as an outstanding graphite project with both high grades up to 26% TGC and about 55% large to super jumbo flakes,” Mustang’s recently installed managing director Dr Bernard Oliver said.
“The combination of high-grade vanadium and the extremely attractive graphite metallurgical results with significant intersections and grades obtained close to surface, highlight the potential for low operating costs based on the production of two commodities which are enjoying robust prices and strong growth prospects,” Mr Oliver added.
Drilling is part of the concept study underway at the project which is due to finish up this quarter.
Caula has a maiden resource of 5.4 million tonnes grading 13% TGC for 700,000 tonnes of contained graphite.
Mustang reported in March that a project review estimated Caula could produce 15,000tpa of graphite concentrate with 97% TGC purity under a stage one operation.
The report initially looked at processing the vanadium under a stage two development, which was hypothesised production of 2,000tpa of beneficiated 99.9% pure vanadium. Mustang also forecast the vanadium mineralisation could add up to US$60 million to the project’s value.
Mustang’s share price had risen more than 4% to A$0.024 by early afternoon trade. Although up, the price is a far cry from its October peak of A$0.183 prior to the company’s disastrous maiden ruby tender.