Syrah Resources (ASX:SYR) has clinched an agreement to acquire an unlisted African explorer Jacana Resources Ltd and will pick up a hefty portfolio of exploration projects - with a diversified mineral exposure in south east Africa.
Interestingly, there have been some significant mineral anomalies identified in a number of the projects to be acquired by Syrah in prospective geological terrains, but which have seen little modern exploration.
Some of the package have seen ore grade drill intersections while others are at early stage.
Subject to Syrah shareholders approval, Syrah will acquire 100% of Jacana from its shareholders and issue 60 million Syrah shares as well as 15 million options to Jacana shareholders.
A payment of A$1 million cash will also be made to a project vendor, being a A$100,000 deposit and the balance of A$900,000 at completion. Syrah will also reimburse some agreed preliminary costs to Jacana to a maximum amount of A$350,000.
Project Portfolio to be acquired
The Jacana portfolio has some 11 exploration projects in all, located in prospective geological terrains in Tanzania (four), Mozambique (three), Zambia (two) and Botswana (two).
The total portfolio licence area of 5,889 square kilometres has strong potential for graphite, vanadium, uranium, coal, rare earth elements, base metals, precious metals and heavy mineral sands.
Initial focus
The most advanced project is Balama, a high grade graphite / vanadium occurrence in Mozambique. The estimated strike distance of the graphite is over 4 kilometres in length.
The Balama graphite occurrence is believed to have been explored by Bulgargeomin in the 1980's. Several trenches are present in the area and the graphite is situated along low lying hills. There appears to be multiple stacked graphite horizons each of unknown thickness. The horizons are within 50 metres of surface.
The Balama graphite is coarse flake graphite which is known to attract a sales premium in the worldwide graphite market.
Appraisal has already commenced at Balama to determine the economic potential.
Balama looks to have potential to become a high tonnage, high grade, coarse flake graphite deposit. Balama is also highly anomalous in vanadium with sample grades up to 1.25% vanadium.
The company intends to move rapidly to mineral resource definition drilling.
An initial planned exploration program will focus on Balama graphite / vanadium and the Mavuzi multi-element prospects in Mozambique, both advanced exploration prospects where early resource definition is possible.
A significant co-incident nickel/copper anomaly has previously been identified at the Mavuzi Project in Mozambique, and has never been followed up. The Mavuzi licence is also anomalous in rare earth elements, molybdenum, gold and silver.
There are also some high quality uranium prospects in the portfolio which are likened in size and potential to existing major world class uranium deposits in southern and eastern Africa.
The prospects are similar in style as they are located in sedimentary basins which host many of the major uranium deposits in Africa.
The most advanced uranium project is also in the Mavuzi licence area where historical drilling identified some very high grades of up to 4,600ppm uranium.
That licence area is also known to be highly anomalous in rare earths, molybdenum, copper, nickel, platinum group elements, gold and silver.
The approval of the acquisition of Jacana will be sought from Syrah shareholders at a deferred Annual General Meeting to be held 14 December 2011.