Crater Gold Mining Ltd’s (ASX:CGN) shares are trading circa 11% higher intra-day after intersecting graphite mineralisation from its first drill hole at the Golden Gate Graphite project in Queensland.
The company started drilling the first hole on 24 November with graphite mineralisation intersected at circa 29.3 metres.
The drilling program involves two diamond core holes for a total of up to 250 metres. The holes are being drilled to geotechnical standard using triple tube equipment.
The samples of the graphite intersections will be assayed for both carbon and gold and will also be dispatched for metallurgical and mineralogical testwork to determine the characteristics of the graphite.
Crater Gold is expecting thick intersections of fresh graphite mineralisation from both the holes.
Nearby high-purity graphite discovery
High-purity graphite mineralisation was discovered at their Esmeralda Graphite Project area, which is located 80 kilometres to the south of the Golden Gate graphite project area.
The geological setting at the Esmeralda Project area is similar to that encountered in the Golden Gate Project area.
Previous test work at Golden Gate non-conclusive
While previous metallurgical test work at Golden Gate confirmed graphite, it has not been conclusive as to the type.
Testwork had indicated that the graphite may be of low-grade amorphous quality.
However, mineralogical examination of the test samples provided contrary results, suggesting that the material may well have been flake graphite that had been pulverised by the action of the drilling bit.
Furthermore, most of the samples tested were oxidised and not ideal for metallurgical testing.
The company recently secured a $4 million unsecured loan facility with one of its major shareholders, Freefire Technology Ltd.
This funding will enable Crater to continue advancing its flagship Crater Mountain Gold Project in Papua New Guinea where it is planning to restart mining operations.