MRG Metals’ stock rallies after excellent results from mineralogical study

Highlights

• MRG Metals Limited (ASX:MRQ) released excellent results from a comprehensive quantitative mineralogical study (utilising XRF, XRD, Bulk Mineralogy and QEMSCAN) within Nhacutse and Poiombo deposits in Corridor South (6621L) exploration license.
• Results show a valuable heavy mineral (VHM) increase to 45.3 % at Nhacutse (previously 44%) and 45.9 % at Poiombo (previously 39%).
• Titanomagnetite results show 26.4% for Nhacutse and 26.1% for Poiombo.
• The new mineral assemblage data of heavy mineral concentrate (HMC) will be used for an upcoming update of the maiden combined Nhacutse and Poiombo Inferred JORC Mineral Resource estimate (MRE).

On 1 April 2022, shares of Heavy Mineral Sands (HMS) explorer MRG Metals Limited (ASX:MRQ) marked a significant uptick of over 22%. MRQ traded at AU$0.011 with a whopping volume of over 37 million shares traded and a market capitalisation of AU$15.72 million.

The key catalyst of this rally seems to be the excellent results from a recent completed comprehensive quantitative mineralogical study. Notably, MRG Metals continues to upgrade its potential mine resource. So much so, the recent enhancement of the valuable heavy mineral (VHM) component at Nhacutsce and Poiombo could have a significant impact on early year cashflows.

VHM is the measure of ilmenite, altered ilmenite, leucoxene, zircon and rutile, as a percentage of the heavy mineral concentrate.

Corridor South (6621L) project, Source- Company announcement, April 2022

DON’T MISS- Engineering Scoping Study & Preliminary Economic Assessment begin on MRG Metals’ Corridor Projects

Mineral assemblage study results

MRG Metals recently completed a comprehensive quantitative mineralogical study (utilising XRF, XRD, Bulk Mineralogy and QEMSCAN) within the Nhacutse and Poiombo deposits in the Corridor South (6621L) exploration license. The study involved 27 composites, 18 from Nhacutse and 9 from Poiombo. Composites were sourced from 56 aircore holes and 159 individual sample intervals.

• The composites returned VHM results of average 45.3% VHM for Nhacutse and 45.9% VHM at Poiombo.
• The average Titanomagnetite was 26.4% for Nhacutse and 26.1% for Poiombo.
• The VHM results are higher compared to the widely spaced historic data used in the Inferred Nhacutse and Poiombo JORC MRE (from the Inferred Mineral Resource 44% VHM at Nhacutse and 39% VHM at Poiombo). It should be noted that the existing MRE for Nhacutse and Poiombo delivered a JORC Inferred Resource of 256 Mt @ 6.0% THM at 5% THM cut-off; or 860 Mt @ 4.9% THM at 4% THM cut-off.
• The new Nhacutse and Poiombo mineralogy data is also significantly better than found within the recently updated JORC MRE from the Koko Massava deposit, with Koko Massava showing an average VHM for the Global resource area of 40% VHM, and 41% for an infill drilled higher grade area.
• The VHM data, including the data from individual minerals in the VHM assemblage, confirmed data from previous work with an increase in the VHM component of the HMC from west to east within the red/red-brown aeolian sand (from average 45.8% VHM in the west to 47.5% VHM in the east of Nhacutse) and north to south as per previous studies.

Significance of the results

The results from the comprehensive study, along with other mineralogical work done by MRG Metals on the Corridor Central 6620 L and Corridor South 6621 L licences were used in planning of a recently initiated targeted aircore drilling program focusing on areas where better mineralogy (higher VHM%) meets high Total Heavy Mineral (THM) grades.

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Chairman Mr Andrew Van Der Zwan believes that this enhancement of the VHM component at Nhacutsce and Poiombo may have a significant impact on early year cashflows. He says that the increase alone on Ilmenite componentry has 2 uplift impacts-

• The circa 15% (39% to 45.9%) improvement over Koko Massava at the same grade will increase the inground value by over USD$1.00/Tonne based on the current Ilmenite pricing ex Mozambique.
• The increased percentage of altered ilmenite further improves the TiO2 composition of the concentrate, to provide further uplift.

Additionally, the enhanced assemblage has the potential of adding substantial cashflows in the first 10 years of production, as per a preliminary scoping study estimate of 20MT/annum process.