Mustang Resources Ltd (ASX:MUS) is targeting first phase production of vanadium and graphite from its Caula project in Mozambique in the first half of 2019.
This makes Mustang one of the closest vanadium-graphite developers to achieving actual cash flows.
What’s more, the economic outlook of the project continues to improve as new drilling results have confirmed near-surface vanadium intersections together with high-grade and quality graphite.
Cheaper to process
The vanadium mineralisation is found in a mica material, which is cheaper to process than magnetite-type deposits.
Managing director Dr Bernard Oliver said: “The outlook for Caula continues to go from strength to strength with every step of the scoping study.
“Caula was already emerging as an outstanding graphite project with both high grades up to 26% TGC and in excess of 55% large to super jumbo flakes.
“The combination of high-grade vanadium and extremely attractive graphite metallurgical results with significant intersections and grades obtained close to surface, highlight the potential for low operating costs.
“This is based on the production of two commodities which are enjoying robust prices and strong growth prospects."
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Latest results from drilling of Fence Line 3 are considered important because they have revealed significant widths and grades with many intersections close to the surface.
Four holes were drilled close to five previous holes from which the 2017 inferred mineral resource of 5.4 million tonnes at 13% total graphitic carbon (TGC) for 702,600 tonnes of contained graphite was derived.
Best result was 6 metres at 0.41% vanadium pentoxide (V2O5) and 19.8% TGC, including 74 metres downhole at 1.02% V2O5 and 96 metres downhole at 24.2% TGC.
Other results include 22 metres at 0.31% V2O5 and 16.2% TGC from 17 metres; 14 metres at 0.36% V2O5 and 16.7% TGC from 17 metres; and 6 metres at 0.31% V2O5 and 17% TGC along with 8 metres at 0.4% V2O5 and 14.2% TGC average.
Drill holes from Fence Line 3 at Caula.
Vanadium resource estimate
Following initial work on Caula’s graphite, laboratory analysis also tested for V2O5, which led to the discovery of high-grade vanadium mineralisation within the ore.
In light of the results, Mustang expects to complete a maiden JORC-compliant vanadium resource in coming weeks followed by feasibility studies.
It aims to undertake a fast-track development to stage I vanadium and graphite cashflow from trial mining in the first half of 2019.
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The vanadium mineralisation is found within a roscoelite mica and has a strong correlation with the high-grade graphite.
Vanadium-bearing micas such as these are typically liberated using less energy and fewer processing steps than magnetite-vanadium deposits found in the South African Bushveld complex and Western Australia.
This creates the potential for higher V2O5 concentrate grades and lower overall operating costs.
A scoping study examining the merits of a full commercial-scale graphite and vanadium operation is expected to be completed by the end of this quarter.
Conditional on a positive outcome, a definitive feasibility study will then be undertaken to serve as a basis for project development and financing.