IM Graphite News in Brief 27 March – 2 April

By Laura Syrett, Kasia Patel
Published: Thursday, 02 April 2015

Magnis Resources signs binding term sheet with China National Materials Industry Import and Export Corp. for funding; Kibran Resources Ltd receives interest from a development finance institution in its Epanko graphite project.

ASX-listed Magnis Resources Ltd has signed a binding term sheet with China National Materials Industry Import and Export Corp. (SINOMA) for $150m in funding to cover engineering, procurement, construction and financing for its Nachu graphite project in Tanzania.

The term sheet is structured on the findings of Magnis’ prefeasibility study for Nachu and has a debt to equity ratio of 90:10, based on Magnis putting in $15m of financing for a total sum of $165m for this areas of development outlined.

SINOMA will provide Magnis with engineering goods and services at the project, for which it has signed two offtake agreements amounting to a total supply deal of 180,000 tpa graphite.

Also in Tanzania, ASX-listed Kibran Resources Ltd has received an expression of interest (EOI) from a development finance institution to co-finance the development of the Epanko graphite project.

The unnamed institution, which has been described as one of the largest European development finance institutions with a strong track record in mining both in Africa and worldwide, will potentially provide a senior loan of up to €20m ($21m*) with a tenure of at least 6.5 years.

The EOI is conditional based on a positive result of an evaluation of the commercial, legal, ecological social and other aspects of the project, including the feasibility study and receipt of the environmental certificate currently being processed by the Tanzanian government.

Although non-binding, the EOI is supported by a binding offtake agreement and a letter of intent (LOI) which is currently being progressed to binding status. Together, the offtake and LOI account for 50% of the planned 40,000 tpa graphite production at Epanko.

IMX Resources Ltd has announced that initial metallurgical test work on core from the Shimba deposit at its Tanzanian Chilalo graphite project has returned concentrate grades with an average of 95.9% C from basic flotation.

The ASX-listed company said that 53% of the fresh material and 47% of the transition material tested was classified as large and jumbo flake size. Average recoveries across both categories were 96.8%. 

A maiden mineral resource estimate for project’s Shimba deposit is expected shortly. 

Elsewhere in Tanzania, Black Rock Mining, formerly Green Rock Energy, has completed 2,200 metres of diamond and reverse circulation drilling at its Mehenge project, which has indicated wider zones of graphite mineralisation than mapped last year.

Over 1,100 samples of 2 metres composites have been sent for assay, the results of which are expected in April.

The company noted that all 16 holes drilled at the Epanko North prospect at the project started and ended in graphite mineralisation.

Black Rock Mining has now started designing an infill drill programme, to start in June, which will enable it to define a JORC-compliant resource at Epanko North and continue defining graphite mineralisation at Kituti.

TSX-V-listed DNI Metals Inc. has released the results of tests on grab samples collected during a due diligence trip to its recently acquired graphite property in Madagascar.

Three samples yielded grades of 9.8% C, 10% C and 35.5% C. The company said that it took the samples over a mineralised zone approximately 2km in length. Additional zones identified on the property bring the total mineralised strike to approximately 3km.

The name of the property has not been disclosed, but is reported to be a past-producing graphite project located approximately 50km south of the Madagascan port of Toamasina on the country’s east coast.

DNI said that a detailed programme of test pit and auger sampling and mapping is currently in the advanced stages of planning and are expected to commence towards the end of April.

Last month, the company signed a letter of intent with Atlantica Geologia e Mineracao SA, Columbia Exploracao Mineral Ltda, and Ricardo Oliveira Gallant de Menezes to acquire a 100% interest, minus royalties, in a graphite project in Brazil.

Also in Africa, ASX-listed Mozambi Resources Ltd is to carry out initial graphite exploration of two licence areas in Mozambique’s Cabo Delgado province.

The two license areas are located in the vicinity of concessions belonging to fellow fellow Australian explorers, Triton Minerals Ltd and Syrah Resources Ltd.

Mozambi Resources said it would proceed with the exploration the appropriate documentation had been filed with Mozambique’s Ministry of Mineral Resources.

In Canada, Great Lakes Graphite Inc. said it has confirmed the presence of hydrothermal lump vein graphite at its Lochaber graphite property in southwest Quebec, following metallurgical tests on samples taken from the project.

The initial analysis was conducted by Process Research Ortech (PRO), based in Mississauga, Ontario, after which samples were then sent to AGAT laboratories, also in Mississauga, where graphitic carbon assays yielded results of over 98% C.

Great Lakes said that additional graphite material is being analysed by PRO, the results of which it plans to use in building an economic model for the project. Purity testing has also commenced and the company intends to collect more material from Lochaber over the next two weeks, subject to ground conditions.

Caribou King Resources Ltd has signed a letter of intent with fellow TSX-V-listed Cavan Ventures Inc. for a potential joint venture (JV) to develop 24 claims attached to the northern boundary of Caribou's Buckingham graphite property in Quebec. 

Grab samples on Cavan's claims have returned values as high as 86.5% C, with flakes over 5mm in diameter, according to results released by Cavan in July last year.

The area proposed for JV development covers an area of 1,682.8 ha (16.83km2). Terms of the definitive agreement will be released pending assay results from a mini bulk sample set to be taken in the coming week.

ASX-listed Lamboo Resources Ltd has executed a binding offtake agreement for a payment of $2m from China Sciences Hengda Graphite Corp., pursuant to a deal signed in July last year between the two companies and Hengda’s largest shareholder, Wang Fengjun.

The July framework agreement provided that the two companies would merge and that $2m would be paid to Wang by way of a refundable deposit. The framework agreement has now been terminated, and on 29 March it was agreed that the deposit will be refunded in instalments by Hengda.

Lamboo expects to be fully reimbursed by 30 June 2015. The company is developing the McIntosh graphite project in Western Australia, as well as gold, copper and molybdenum projects in other parts of the country.

To Europe, where Perth-based Talga Resources Ltd has received a test mining permit from the Environmental Review Commission within the Norrbotten County Administration Board for its Vittangi graphite project in Sweden.

Approval is valid until 30 September 2018 and covers the extraction of 2,000 metres cubed (5,000 tonnes) graphite ore from the Nunsvaara resource area of the Vittangi project.

The company said it can now start site work preparations, contract selection, equipment mobilisation and all other ancillary work in advance of the extraction programme.

In financing news, TSX-V-listed Focus Graphite Inc. has closed the second and final tranche of a previously announced private placement for gross proceeds of Canadian dollar (C$)883,799 ($699,489*).

For the second tranche, Focus issued just over 2.525m units at a price of C$0.35/unit, with each unit being comprised of one common share in the company and one half of one common share purchase warrant, with each warrant entitling the holder to acquire one additional common share at a price of C$0.55/share until 27 March 2017.

Focus paid cash finder’s fees totaling $61,866 and issued 176,759 non-transferable warrants in connection with the offering.

*Conversions made April 2015