On 02 August 2019, MRG Metals Limited (ASX: MRQ), a mineral exploration company with focus on the Australian and overseas markets, provided an update on aircore drill program on heavy mineral sands (HMS) projects (Corridor Central and Corridor South) in Mozambique. The southern African nation, Mozambique is known to host the largest HMS titanium feedstock resources, globally.
Source: Company’s Report
Exploration Data Review
In the market update on ASX, MRQ reported to have identified 11 high quality targets for drill testing, based on a comprehensive exploration data review.
The review included following aspects:
1.Historic aircore drilling: The company identified impressive high THM (Total Heavy Mineral) grades from surface to depths up to 90 metres from reconnaissance aircore drilling undertaken by Southern Mining Corporation and Western Mining Corporation during 1999-2000. A total of 35 holes were drilled at the Corridor projects, with the holes defining zones (high grade) of more than 5 per cent THM with surface footprints up to 5.5 km x 1.5 km.
2.Interpretation of recent airborne geophysical data: The company undertook an extensive airborne magnetic and radiometric survey at the HMS projects, which identified already known highly prospective zones (from historic drilling), and several other high-quality exploration targets. The airborne magnetic data interpretation from the survey, which was conducted by the company during the month of April 2019, defined large, discrete anomalies up to 3 km x 0.5 km (radiometric anomalies up to 4km x 2km ) on the Corridor Central tenement and 9 km x 1.0 km (radiometric anomalies up to 4.3km x 1.5km) on the Corridor South tenement. Additionally, magnetic data interpretation unveiled at least 12 TMI-AS anomalies that needs drill testing.
3.Reconnaissance Hand Auger drilling: MRQ identified high THM grades, based on the visual estimation of THM% grade in pan concentrates, confirming the validity of historic Aircore results. The company drilled shallow hand auger holes to a depth of 10.5-12 metres.
4.Preliminary Mineralogical Study: Results from a preliminary mineralogical study unveiled a robust and high quality, ilmenite-rich valuable heavy mineral assemblage. The palaeogeographic coastal features known to host high-grade strandline style HMS mineralisation were identified to be as good as, or better than for the nearby Corridor Deposit 1, which is being mined by Deshing Minerals.
5.Comparative study: The study against surrounding analogous deposits affirmed that each of the resultant drill targets hold great potential. The analogous deposits are either in the production stage or in the pre-feasibility study (PFS) stage, surrounding the Corridor Central and Corridor South projects.
The evaluation of all the above five data points enabled the company to identify the 11 discrete, high quality targets for drill testing. Of these 11 targets, the company defined three targets with higher priority for immediate aircore (AC) drill testing. The drilling program, with an initial depth of 5,000 metres and planned to be carried out under a phased approach, is focused towards establishing a quality JORC-compliant mineral resource estimate to be used for starting a Scoping Study.
Location Map of the 3 Priority AC Drill Targets (Source: Company’s Report)
Koko Masava Prospect – The First Target under the Drilling Program
The first target, namely the Koko Masava prospect, is drill ready.According to high intensity radiometric anomalism and high total heavy mineral (THM) grades defined in the Koko Masava prospect, the higher priority radiometric Anomaly 1 holds the highest potential of delivering on the strategy of MRQ to focus on the zones with high THM grade and high value mineral assemblage.
As part of the drilling program at the Koko Masava prospect, the company would drill a maximum of 51 planned drill hole locations to an average depth of 50 metres. Additionally, the program would cover selected deeper ‘stratigraphic’ holes to further understand the depth potential for mineralisation.
Detailed Location Map of Priority 1 AC Drill Target (Source: Company’s Report)
Poiombo Prospect & Nhacutse Prospect
Under the second phase of drilling, MRQ would target the Poiombo prospect, which is the magnetic Anomaly 10. The company plans to drill up to 35 holes to an average depth of 50 metres. For the third target, namely Nhacutse prospect, the company would drill up to 36 holes at an average depth of 50 metres.
Furthermore, the company would include at least 3 twin holes of previous historic drill holes under the current AC drill plan. Additionally, community engagement, drilling permits and environmental approvals are underway.
Plans Going Forward
Via several tender proposals, the company has shortlisted a suitably qualified drill contractor, with preparations related to the mobilisation progressing well. MRG Metals Limited plans to start mobilisation during the mid of August 2019.
MRG Metals Limited intends to continue regional auger drilling on the Corridor tenements, aimed towards generating, testing and prioritising further targets for AC drilling. Moreover, the company plans to review drilling priorities, with the collection of any new data.
MTA Assessment/Cash Flow Statement
Recently, the company unveiled to have secured a binding tax assessment from the Mozambique Tax Authority (MTA) related to the Heavy Mineral Sands (HMS) Projects in Mozambique. The evaluation of the capital gains tax payable was related to the indirect transfer of Mozambique mineral rights to the company. Additional details related to the MTA evaluation can be READ HERE.
In its recently released cash flow statement for June quarter, the company reported AUD 243k operating cash outflow with cash and cash equivalents at AUD 405,000 at the end of June 2019. The company plans to undertake AUD 100k in exploration and evaluation activities next quarter.
The stock of MRG Metals Limited last traded on 2 August 2019 at a price of AUD 0.007. MRQ has a market cap of AUD 4.67 million and approximately 667.17 million outstanding shares. It has provided impressive YTD return of 75.00%. The company’s securities were placed in a trading halt on 5 August 2019, pending the release of a capital raising announcement.
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