Controversial ruby miner Mustang Resources (ASX: MUS) has unearthed huge thick, high-grade graphite and vanadium at its Caula project in Mozambique.
Diamond drilling intersected up to 125m of mineralisation with grades ranging up to 24.2% total graphitic carbon (TGC) and 1.02% vanadium.
Results from 1m composite samples returned 125m grading 14.1% TGC and 0.42% vanadium pentoxide, with numerous intervals grading between 23% TGC and 24% TGC, and 0.7% vanadium to 1.02% vanadium.
These latest holes were drilled close to five holes that were undertaken in 2016 and returned similar results.
“Caula goes from strength to strength, as these new results how,” Mustang’s new managing director Dr Bernard Olivier commented.
“We have very high graphite grades, substantial widths and a very significant proportion of large and jumbo flake sizes,” he said.
Dr Olivier noted there was also “substantial” vanadium mineralisation.
Plans to bring Caula online by mid-2019
Mustang advised the market yesterday that a review of the project had revealed it could be brought online in a little over 12 months.
Caula has a maiden JORC-compliant resource of 5.4 million tonnes grading 13% TGC for 700,000t of contained graphite.
Around 55% of the flake graphite found at Caula has been classified as between large and super jumbo sizes.
The review also identified that vanadium could potentially add up to US$60 million in value by producing about 2,000tpa of the beneficiated 99.9% pure vanadium product under a stage two scenario.
In a stage one development, which the company hopes to bring on line mid-next year, it has hypothesised that Caula would produce 100,000tpa which would be processed to create 15,000tpa of graphite concentrate with 97% TGC purity and stockpile the vanadium for processing under stage two.
Mustang’s plan is to leverage off stage one operations to scale up to stage two where it would increase its graphite operation to 600,000tpa to produce 75,000tpa of 97% TGC graphite concentrate.
A concept study is underway and due to wind up next quarter and will include 1,400m of diamond drilling data.
However, today’s news comes after the company was forced to retract a statement from yesterday’s announcement, with the ASX claiming the company had breached its listing rules by providing a “hypothetical statement about grades, production targets and forecast financial estimates”.
Failed maiden ruby tender
Mustang’s foray into graphite comes after the company botched its maiden ruby tender by failing to accurately gauge and cater to its market.
As a result, the company sold only 8% of its inventory. The flopped tender left many investors angry and saw the company’s share price plummet almost 400% from its heights of around A$0.19 to less than A$0.04.
The company’s managing director at the time Christiaan Jordaan called it quits and was replaced by Mr Olivier as an attempt to revive investor faith in the company’s management. Mr Jordaan remains a director on the company’s board.
Previously a market darling, Mustang has continued to try courting investors back with numerous announcements about new ruby marketing strategies and its graphite assets in the region.
By late afternoon trade, Mustang’s share price had plunged 10% to A$0.026.