Lincoln Minerals resumes ASX trade with advanced graphite project and ‘reinvigorated board’
Jigsaw Investment’s chief investment officer Julian Babarczy says Lincoln Minerals presented as a unique investment opportunity through its Kookaburra Gully graphite project.
Following a $4.6 million rights issue cornerstoned by Jigsaw Investments chief investment officer Julian Babarczy, Lincoln Minerals (ASX: LML) has re-joined ASX ranks with a “reinvigorated board” and strong focus on becoming a premier Australian graphite producer.
The company’s flagship asset is the Kookaburra Gully graphite project, which is only 35km north of Port Lincoln in South Australia.
A 2017 pre-feasibility study gave Kookaburra Gully an initial 10-year mine life and anticipated production of about 35,000 tonnes per annum of flake graphite.
According to Lincoln, Kookaburra Gully is among the world’s top 10 graphite deposits in terms of grade, which averages 15.1% total graphitic carbon (TGC).
There is also potential to expand the mine life with nearby satellite deposits.
Kookaburra Gully lies within granted mining leases, and bulk samples of its ore have already been tested in China.
Metallurgical test work is continuing, and the project has a low capital expenditure outlay of $50 million.
Reinvigorated board
Lincoln’s shares have been suspended from trading since September 2020, after fending off Quantum Graphite’s (ASX: QGL) takeover attempts.
Mr Babarczy cornerstoned the recent $4.6 million rights issue, saying the company presented a unique investment opportunity through Kookaburra Gully’s existing resource, a pre-feasibility study and new management team.
Guiding the company through its next steps are a new board and management team.
At the helm as chief executive officer and managing director is Sam Barden and he is joined by Ruiyu Zhang as chairperson and chief financial officer, Jason Foley as non-executive director and Andrew Metcalfe as company secretary.
Mr Barden said the company’s “reinvigorated board” has a “defined go-forward strategy” at Kookaburra Gully to maximise shareholder value.
“This rights issue will give our company the capital required to kick start this go-forward strategy and put Lincoln on the path of its goal to become one of Australia’s premier graphite producers,” he added.
Graphite portfolio
Lincoln holds the rights to 1,177 square kilometres of exploration licences in South Australia.
The Kookaburra Gully project includes its namesake deposit, the Koppio historical mine and the Kookaburra Gully Extended tenements.
Koppio was mined on an intermittent basis in the early 1900s before being abandoned in 1943 and closed a year later.
An electromagnetic survey in 2012 identified a 4.5km-long conductor, which extends southwest from Kookaburra Gully. This area is known as Kookaburra Gully Extended.
Making up the resource are Koppio and the Kookaburra Gully deposit, which total 3.88 million tonnes at 12.6% TGC for 489,360t of contained graphite.
Kookaburra Gully also has a reserve of 1.34Mt at 14.6% TGC for 196,000t graphite.
Funds raised in the rights issue will pave the way for further exploration and developing Kookaburra Gully into a mining operation.
The 2023 exploration program aims to better define surrounding satellite deposits and other targets within the wider portfolio.
Up to 40 infill holes will be drilled over Koppio to upgrade the resource to indicated, with a further 100 holes planned on newly defined regional targets.
The company has allocated a budget of $1.47 million for the 2023 field season.
In addition to drilling, Lincoln will complete soil geochemistry and geophysics surveys.
Other assets
While graphite is Lincoln’s focus, it also owns the Eurilla tenement along strike from the Wilcherry Hill magnetite and gold deposit in South Australia.
Eurilla is also close to Investigator Resources’ (ASX: IVR) Paris project, which hosts Australia’s highest-grade undeveloped primary silver deposit.
Other nearby deposits are prospective for zinc-lead-silver and iron ore.
Lincoln’s preliminary work at Eurilla has identified it as being prospective for iron ore, uranium, gold, manganese, silver and base metals.
Graphite market
Compelling Mr Babarczy’s investment in Lincoln and the company’s focus on graphite are forecasts the market is in the early stages of a super cycle, due to its necessity in lithium-ion batteries.
Graphite is a key ingredient in the anode of a lithium-ion battery, which powers electric vehicles and renewable energies.
Like most commodities, China dominates the graphite market and Lincoln’s strategy is to provide a high-quality Australian source.
“Lincoln’s unique asset base, including the Kookaburra Gully graphite project, positions the company to benefit from the increasing demand for graphite as global economies decarbonise and batteries are key in the storage of electricity generated from renewable energies,” Mr Barden said.
“Importantly, production of graphite from Australia would assist in establishing a more geographically diversified supply chain for the global battery industry, which is currently heavily reliant on supply from China and Africa,” he added.