MRG Metals Announces Quarterly Updates; Impressive Results for HMS Projects

A mineral exploration company headquartered in Victoria, MRG Metals Limited(ASX: MRQ) majorly focuses on base metal, silver, nickel, gold and heavy mineral sands (HMS). The deposits of HMS are majorly exploited for their titanium and zircon content. The company is focused on the Australian and overseas markets.

The explorer, on 31 July 2019, released its quarterly activities report for the period ended 30 June 2019 on the Australian Stock Exchange. Let us have a broader look at the company’s activities during the quarter gone by.

Update on Heavy Mineral Sand (HMS) Projects in Mozambique

Tax Assessment from MTA: MRQ reported to have received a binding tax assessment, from the Mozambique Tax Authority (MTA), of the capital gains tax payable, concerning the indirect transfer of Mozambique mineral rights. MRQ acquired Sofala Resources Pty Ltd and its subsidiary Sofala Mining and Exploration, Limitada (SMEL) in January 2019. The capital gains tax worth AUD 70,609 is associated with the mineral rights in Mining Titles 6620L and 6621L, which were owned by SMEL.

The application for tax assessment was submitted with the tax authority on 6 March 2019, while MRG Metals lodged an application seeking approval for the transfer of indirect beneficial rights in the mining titles with the Ministry of Mineral Resources and Energy (MIREME) of Mozambique on 23 May 2019.

The explorer is in the process of making the payment towards the tax assessed, as this is the remaining item required by the MIREME to give a thumbs up to the indirect transfer of ownership of the mining titles to MRG. According to the market update, the explorer has retained MXR Serviços Jurídico-Fiscais (MXR) in Mozambique and tasked MXR to prepare an independent professional assessment of the capital gains tax. MXR will also aid the explorer in the process of securing the Tax Clearance Certificate and Transfer Consent in relation to a change in the mineral rights’ indirect ownership. The approval from the ministry is timing and process based, following which MRQ plans to move forward with the exploration program.

Airborne Geophysical Survey: The company had contracted Geotech Limited to undertake the airborne geophysical survey over Corridor Central (6620L) and Corridor South (6621L), assets under the HMS in Mozambique. Data sets obtained from the radiometric survey included equivalent ground concentrations of radioactive metal Thorium (Th) and chemical element Uranium (U) parts per million (ppm), and mineral Potassium per cent (K%). Geotech identified large, coherent Thorium anomalies up to 4km x 2km on the Corridor Central tenement and 4.3km x 1.5km on the Corridor South tenement, occurring within broader, more diffuse areas of anomalism.

Equivalent Ground Concentration Response for Thorium (Source: Company’s Report)

Meanwhile, interpretation of the data set obtained from the airborne magnetic survey has defined large, discrete anomalies up to 3km x 0.5km on the Corridor Central tenement and 9km x 1.0km on the Corridor South tenement, occurring within broader, more diffuse areas of anomalism.

Based on the data interpretation of both airborne geophysical and magnetic surveys, the company is prioritising the comprehensive portfolio of exploration targets for drill testing. Moreover, it is focusing on improving understanding related to the location of palaeogeographic coastal features and other project geology aspects. These features are typically known to host high grade HMS strandline-style mineralisation. The company’s next steps would focus on including systematic aircore drilling of the best targets.

Hand Auger Drilling: In the June quarter, MRG Metals undertook shallow hand auger drilling in the northwest of the Corridor Central tenement on the Koko Masava prospect. The company, which drilled a total of 18 verification and orientation holes, collected 127 samples, which didn’t include QA/QC samples.

During the reconnaissance auger drilling on Corridor Central, the company discovered impressive visual estimated THM grades up to 12% from individual down hole samples at the Malehice Prospect. Meanwhile, during the reconnaissance auger drilling focused in the northern sector of the Corridor South tenement, MRQ discovered impressive visual estimated THM grades up to 7% from individual sample intervals. Field inspection of the pan concentrates indicates that auger holes in the Corridor South reconnaissance and in the western sector of Corridor Central tenement consist of valuable heavy minerals like ilmenite, rutile and zircon.

Import Permit for Auger Sample Analysis: The company also reported to have secured an import permit to undertake the heavy liquid separation analysis of auger and aircore drill samples in Australia. MRQ sought the permit, as it enables keeping the heavy mineral concentrates in the company’s custody. Moreover, the company can perform several other analyses on the mineral concentrates, with the competent person undertaking the mineral resource estimation for the formal laboratory audit and performing unannounced inspections. All these activities are the key elements of a diligent mineral resource estimation process. First samples have already reached Australia.

Impressive Results from Mineral Assemblage Sample Analyses: Mineral assemblage characterisation of three selected samples as heavy mineral concentrates from the Corridor Central and Corridor South tenements yielded impressive results. The analysis by Process Mineralogical Consulting Limited in British Columbia identified valuable mineral assemblage of robust and high-quality nature within the tenements, including the best VHM result of 57.35%, comprising of 54.72% ilmenite, 2.06% zircon and 0.58% rutile.

Below figure represents summary of the valuable heavy mineral contents within total heavy mineral for the three selected samples from the tenements.

Source: Company’s Report

The mineral assemblage data, in addition to high grade visual estimates of THM grades from airborne geophysical survey, establishes the significant prospectivity of the Corridor Central and Corridor South tenements for large and high value HMS deposits. Consequently, the company is set to undertake an aircore drilling programme in the near future.

Cash Flow Statement for June Quarter: Meanwhile, MRG Metals released its cash flow statement for the quarter ended 30 June 2019. The company reported $ 243,000 in net cash used in operating activities in Q4 FY19, while FY19 net cash used in operating activities stood at $ 1.18 million. Of the total, receipts from customers were $ 5,000, while payments related to exploration & evaluation, staff costs, and administration and corporate costs were $ 135,000, $ 80,000, and $ 35,000, respectively in Q4 FY19. Its cash and cash equivalents at the end of June 2019 reached $ 405,000. For the next quarter ending September 2019, the company expects its cash outflows to be $ 260,000.

Source: Company’s Report

Stock Performance: With a market cap of $ 3.34 million and approximately 667.17 million outstanding shares, MRQ stock traded flat at $ 0.005 on 1 August 2019 (AEST: 1:59 PM). MRG Metals has delivered a YTD return of 25.00%.

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