It is already proved by Metals Australia Limited (ASX: MLS) that its Quebec project is a high-grade zone of natural flake graphite. The news was much appreciated by the investors which took the share price of the company up by almost 17% which is equivalent to 0.35 cents this morning.
Within a span of 12 months, the share price was in the range from 0.3 cents to 1.1 cents.
A sampling program was held at the Lac Rainy project in Quebec, Canada. During this program, the results obtained, returned an average grade of 15.6% total carbon-within-graphite (Cg) within 20.4 meters. It returned an average grade of 20% Cg which include 4.5 meters of the sampling program.
It is assumed that the graphite having grades in between 10% to 15% is an average grade. Above that range, the grade of the graphite is considered very good.
As per the Metals Australia, there is an extension in the length of the mineralization which is more than 3km. Within this range of mineralization, there is a zone which returns multiple high-grade intervals which is up to 29.4% Cg which is around 1.8 km in length.
Gino D’Anna who is the director of Metals Australia stated that the width of mineralization is above the expectation. The surface is a source of high-grade mineralization which is very encouraging.
Metals Australia defines the deposit in the range of 15% to 20% in sufficient capacity which it considers similar to the Lac Knife project which is owned by Focus Graphite (TMX: FMS).
The director Mr. D’Anna considers these exceptional channel sampling result as a step ahead towards the goals of the company.
Still, more result is expected from the program. The first step towards defining a resource for the project is expected to come in the late November. During the Canadian winter, the drilling program will start. The results of the drilling will undergo analysis and interpretation of the current test results.
MLS remains a consistent negative performer since inception. Since inception, the performance of the company is -70%. The 1 year, 5 years and 10 years performance of the company is -40%, -76.92% and -57.14% respectively. For the year ended 30 June 2018, the net loss of the company was $3,404,921. The total asset of the company is $9,019,951 and total liabilities of $300,735. This indicates that the company is in the position to meet its long-term obligations. The balance also depicts the potential of the company to meet its short-term obligation as well as the working capital. FY2018 also encounters an increase in the accumulated losses which indicates that shareholder’s equity is being eroded as compared to the previous year. The total shareholder’s equity is $8,719,216.
This year, there was an increase in the payment made to suppliers and employees. This increased the net cash from operating activities which was $1,448,110 by the end of the year. The net cash from investing activities was $636,671 where the major cash outflow was due to the exploration expenditure. The net cash from financing activities was $3,100,907. The cash and cash equivalent by the end of the year was $2,101,255.
Based on the Q1, FY2019 the net cash and cash equivalent were A$1.450 million. By the end of the day, the market price of the share was A$0.003 with the market capitalization of A$7.03 million.
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