Sovereign Metals (ASX: SVM) has dialled into the graphite sector in Africa with the acquisition of the Central Malawi Graphite Project in Malawi.
Worth noting - historic rock chip grades of up to 21% total graphitic carbon and representative average of 10.5% total graphitic carbon have been recorded.
Importantly the project is located in a major graphite province that hosts other graphite projects including Syrah Resources' (ASX: SYR) Balama.
Investors appear impressed with the area, as Syrah shares have risen from around $0.20 to $2.94 since the start of the year.
The deal has Sovereign Metals entering into an agreement to acquire McCourt Mining Pty Ltd, which holds the project, for consideration of; $100,000 cash payable immediately; $900,000 cash payable on completion; 12,500,000 fully paid ordinary shares on completion; along with an unlisted convertible performance shares portion and 2% net mine gate royalty.
Upone completion of the deal, Sovereign Metals with have a 100% unencumbered control of 8,070 square kilometres of prime graphite terrain, with the main prospects within 50 kilometres of operating railway that connects to the Nacala deep water port.
Where the story becomes even more interesting is that there are five major, regional graphite gneiss belts identified with over 100 square kilometres of verified outcropping graphite gneiss - and a cumulative strike length of around 270 kilometres.
Graphite prospects already identified
Investors will be pleased that three prime prospects have already been identified with substantial areas of high-grade graphite gneiss at surface.
At the Tuinchi Prospect, historic rock chip grades of up to 21% total graphitic carbon and representative average of 10.5% total graphitic carbon have been recorded.
At least a further 50 separate targets with known graphite gneiss in outcrop and/or logged in historical water bore drilling will be progressively explored.
The majority of graphite mineralisation identified to date is of the coarse to very coarse flake variety. Historical metallurgical test-work on projects in this region shows that high grade, coarse flake concentrates can be produced.
News flow to ramp up
Sovereign Metals has a raft of exploration plans in the short term, including mapping and rock chip sampling, initial trenching, airborne electromagnetic surveys which can then lead to drilling programs.
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