Armadale Capital PLC (LON:ACP) shares added almost 6% as it said it expects to soon start follow-up drilling at its prospective Mahenge Liandu graphite project in Tanzania after magnetic surveys have underscored the site's potential.
Drilling is planned to start in six to eight weeks and talks with drill firms over a reverse circulation (RC) and diamond drilling programme have already started, the company said.
Multiple targets in the surveys were identified over a strike length of 2.6km at the project's main Liandu prospect.
Armadale chairman William Frewen said: "Having recently completed the acquisition of Mahenge Liandu, we are delighted to have already identified prospective targets for drilling, underpinning our fast paced development strategy."
Recent rock chip sampling has already shown high grade graphite mineralisation of up to 33.8% total graphite content (TGC).
This has supported recent drill results of 60m at 10.7% TGC, including 24m at 12.9% TGC and 5m at 21.5% TGC.
"With a strike length of 2.6km identified at the primary Liandu Prospect, which remains open, and a further mineralised zone identified to the west of this prospect, which has a 3.7km strike length that again remains open, we have identified strong targets for follow-up drilling.
"We are now focused on finalising our drill programme in order to further define the resource potential.
"This is expected to start in 6-8 weeks and will initially focus on the Liandu Prospect. We look forward to updating shareholders with our progress.”
The project represents a significant opportunity in an industry with exciting demand fundamentals, Armadale has said, not least as graphite is a raw material in lithium ion batteries, which are used to power electric vehicles, as well as being a critical factor in the energy storage revolution currently taking place.
The firm is aiming to be a first to market AIM graphite firm in a politically stable country.
Black Rock has delineated approximately 80% of their resources in eight months demonstrating the opportunity to add significant value to the Liandu project in a short time frame, noted Armadale.
On March 22, a scoping study from Black Rock showed a 52,000 tpa graphite concentrate mining operation with a 25 year mine life at cash costs of US$458/t.
Also immediately to the east is Kibaran Resources' (ASX:KNL) Epanko Project, where Kibaran completed a bankable feasibility study in July last year, showing proven and probable ore Reserves of 10.9Mt at 8.6% TGC.
Armadale shares gained nearly 6% to stand at 2.25p.