Hexagon Resources Limited (ASX: HXG) today released its March 2019 quarterly activities and cash flow report with the revised Mineral Resource Estimate for McIntosh Joint Venture Project.
In the announcement dated 17 April 2019, Hexagon reported that the McIntosh Flake Graphite Project combined Mineral Resource now totals 23.8 million tonnes grading 4.5 % Total Graphitic Carbon (TGC).
The revised estimate saw McIntosh’s contained graphite increase by 12% while material classified as Indicated (rather than Inferred) increased by 42%. The McIntosh flake graphite project is a Joint Venture between Hexagon and Mineral Resources Ltd, with MinRes earning a 51% interest in the project through exploration and development and Hexagon remaining 49%.
Managing Director, Mike Rosenstreich stated that Hexagon targets to bring McIntosh into production at the earliest, subject to a positive Feasibility Study.
The revision was reportedly based on additional drilling results from 2018 drilling comprising 10,683m of combined diamond core and reverse circulation drilling undertaken by MinRes at Emperor, Wahoo and Mahi Mahi.
The report read that the updated Exploration Target highlights a potentially significant flake graphite endowment, reviewed rigorously with the benefit of new data and increased understanding of the geological controls for factors such as flake size.
Hexagon further believes that the revised resource estimate with an increase of 12% in the quantity of contained graphite has substantially improved the confidence of the total resource within the McIntosh project.
The Company is also increasing its presence in the USA, leveraging off existing important technical relationships to build its marketing presence there and in Europe ahead of McIntosh material becoming available and potentially to diversify its source material, with new graphite project opportunities in a very favourable end-user environment.
MinRes and Hexagon are collaborating on a metallurgical test work program, which is underway. For this purpose, MinRes is undertaking a similar dual “from the rock” and “from the plant” test work approach as the recent drilling generated more sample material for more definitive test work. The company told the work is focused on characterising the flake size distribution for each deposit as more sample materials are available.
Further, Hexagon acquired an 80% interest in Charge Minerals from USCM for US$50,000 and has agreed to fund all exploration and development work by way of shareholder loans up to the first production. Charge Minerals has a 100% interest in the Ceylon Graphite Project comprising 200ha on the southern portion of the Alabama Graphite Belt, Alabama, USA.
This investment underscores the Hexagon’s strategy to acquire the project that delivers the type of graphite suitable for specific end-users in the USA and where mineralisation is outcropping and large bulk samples can be readily collected via excavator rather than drilling.
HXG stock priced declined by 7.143% to last trade at $0.130 on 17 April 2019. Over the past 12 months, the stock has witnessed a negative performance change of 34.88% despite a marginal upside momentum of 3.70% in the past one month.
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