Metals Australia Reports Completion of Maiden Drilling at Lac Rainy Graphite Project

Metals Australia Ltd (ASX: MLS) is a mineral exploration company with a primary interest in base metal and gold projects located in Western Australia.

On 17th May 2019, Metals Australia informed the stakeholders that the maiden diamond drilling program at its wholly-owned Lac Rainy Graphite Project, situated in Quebec, Canada, has now come to an end.

With ~ 2.69 billion outstanding shares, the MLS stock price skyrocketed by 100% and closed at a price of A$0.002 (as on 17 May 2019), from the previous day’s close of $0.001 with ~1.62 million shares traded.

The drilling program consisted of 17 drill holes for a total of 2,318 m and extended along strike for ~ 1.25 km along the northwest. Graphite flakes mineralisation was intersected in all drill holes measuring several dozens of meters (in apparent width) with a maximum of 75.2 m (in apparent width) in hole DDH LR19-09. A total of ten (10) holes from the seventeen (17) drill hole program finished in mineralisation and remain open at depth.

The Carheil Graphitic Zone was confirmed below the surface and within the Eastern and Western extensions, known as the East Carheil Graphitic Zone and the West Carheil Graphitic Zone.

The map below illustrates the drill hole locations from this Phase II exploration campaign at the Lac Rainy Graphite Project. The drill hole sites were selected based on the trenching and channel sampling program that was completed during 2018 and is also outlined in the map below.

Source: MLS’s ASX announcement dated 17 May 2019

A total of 860 half core samples were selected on graphite flake mineralized intervals intersected and on the altered and barren wall-rock mineralisation. Of these, a total of 117 samples were used for Quality Assurance and Quality Control of geochemical analysis (QA-QC) and included blank samples, three certified Cg standards samples (low, med and high grade of graphitic carbon Cg) and duplicate samples. Subsequently, all the samples have been shipped to ALS Geochemistry Laboratory of Val d’or, Quebec, Canada for assaying of mineral and organic Carbon, Sulphur and minor trace Elements.

Currently, Metals Australia is awaiting the receipt of the results. Thereafter, it would undertake further metallurgical and mineralogical testing on the drill core, designed to improve the geological understanding of the potential resource at Lac Rainy.

This information will support the Company in progressing the discussions with potential key end-user groups, as well as provide valuable information for the estimation of a Maiden JORC resource estimate.

At Lac Rainy, many additional targets remain untouched and will be included in the follow-up exploration campaigns in the future.

The global transition to renewable energy promoting adoption of lithium-ion batteries as a means of energy storage has great implication on the demand for high-value raw materials, such as graphite, lithium, cobalt, nickel, copper and manganese. In the long term, Roskill, an independent research firm, has stated that the ongoing closure of processing plants in China and rising demand for high-quality graphite concentrates will place an upward pressure on graphite prices.

In its quarterly report for the March 2019 quarter, Metals Australia has posted ~ $839k of operating cash outflows along with $562k of cash inflows from financing activities. The cash balance was ~ $898k as on 31st March 2019.


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