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Wednesday, 2 October 2013
Mason Graphite to de-risk flagship project even further in upcoming months amid aggressive development
Mason Graphite (CVE:LLG) provided investors Wednesday with an update on its Lac Guéret project, saying it plans to complete a number of steps that would de-risk the asset even further in the upcoming months, such as the start of a feasibility study and piloting program.
The company has come a long way since acquiring the Quebec project in April of last year, completing 26,500 metres of drilling since that time, and providing an NI 43-101 compliant resource and preliminary economic assessment for the property.
Mason even recently unveiled some outstanding preliminary results testing the purity of graphite from its flagship Lac Guéret project, opening up the size of its potential customer base to applications that require extremely high purity levels. According to a company statement released in late September, Mason announced purities of 99.9% graphitic carbon from preliminary tests using a conventional hydrometallurgical process concentrated at SGS Canada in Ontario, improving on results seen in the preliminary economic assessment study of the project. Further larger-scale testing, from which results will be included in the upcoming feasibility study, are underway.
“The recent developments at our Lac Guéret project have all either met or exceeded our expectations," said president and CEO Benoît Gascon in a statement Wednesday. "This is very encouraging to us and the speed at which we have been able to advance the project speaks to the quality of our project and of our experienced team members."
He further said the company will continue to work diligently to advance the project with the aim of becoming a graphite producer as quickly as possible.
Last month, Gascon highlighted that reaching the 99+ level of target markets for graphite means additional volumes for when the company completes its feasibility study, which is due to begin in the fall of this year. Currently, Mason is working on a request for proposals to select an engineering firm for the report. It anticipates wrapping up the study by the final quarter of next year.
First up though, the company is expecting to release an updated resource estimate for the project by November this year, with additional drilling from 146 holes since the last resource report was released in July 2012. All the data from the 2012 drilling campaign has now been obtained, with 3D modeling of the mineralization currently underway.
At the moment, Mason's project, which is located near the city of Baie-Comeau with a road running straight up to the deposit and all other services nearby, has 0.3 million tonnes of resources at 24.4% graphitic carbon (Cg) in the measured category, and 7.3 million tonnes grading 20.2% Cg in the indicated category. The project’s estimated average grade is 27.4% for the first 22 years of mine life, according to preliminary economic results released in April.
The company is also planning to initiate a permitting process for the project by filing an environmental baseline study, with the pilot plant phase expected to start next year, after a bulk sampling program this fall to collect enough ore for the preliminary plant. Additional drilling to further test mineralization at the current boundaries of the deposit will also be done, ensuring Mason has all the information it needs for the final economic study.
In the preliminary work, direct capital costs for the project were estimated at $89.9 million, while production costs were seen at $390 per tonne.
The company will be wasting no time in capitalizing on the anticipated growth in demand for graphite -- a mineral form of the element carbon that forms in veins inside metamorphic rocks -- as lithium-ion battery adoption continues. Its cash position is some $7 million, quite comfortable for a Canadian junior miner, but the company still needs to raise more funds to complete the feasibility study and pilot plant phase of the project, which will produce enough material to start the process with some customers and optimize the design of the plant.
In the release Wednesday, the company said it will raise $62,000 through a non-brokered private placement financing of 155,000 common shares, and has also applied to the TSX Venture Exchange to extend the term on over 12.6 million warrants that were set to expire at the end of this month.