Name of the Project
Caula graphite and vanadium project.

Location
Mozambique.

Client
Mustang Resources.

Project Description
Caula contains an exceptional combination of high-grade (13%) total graphitic carbon and could deliver high percentages of super jumbo, jumbo and large flakes.

A strategic review has found that the most effective way to develop Caula involves a two-stage development strategy.

Stage 1 comprises a robust, low-cost mining operation producing about 100 000 t/y of ore for 10 000 t/y to 15 000 t/y of high-grade (97% carbon) graphite concentrate.

From the start of operations, vanadium will be extracted to a concentrate. This will be sold to a vanadium producer or stockpiled for future production of refined vanadium pentoxide (V₂O₅) chemicals. The Stage 1 graphite plant is being designed to allow for future incorporation of all processing equipment into the larger Stage 2 graphite plant.

The sale of graphite and vanadium products produced in Stage 1 will be used to secure binding off-take agreements and associated finance required for Stage 2 development.

Stage 2 entails the expansion of mining operations to between 300 000 t/y and 600 000 t/y of ore.

A large full-scale processing plant capable of delivering 50 000 t/y to 75 000 t/y of high-grade (97% carbon) graphite concentrate will be built.

A full-scale vanadium concentrate processing plant, capable of producing refined vanadium products (99.9% purity V₂O₅ and other vanadium chemicals such as vanadium sulphate) for the fast-growing aerospace alloy and battery markets, will also be built.

With a hypothetical ore grade of 0.4% V₂O₅, a 600 000 t/y mining operation could produce about 2 000 t/y of V₂O₅ (98% and 99.9% purity V₂O₅ chemicals), with a current market value of more than $60-million a year.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
Not stated.

Duration
Stage 1 of the project development is expected to be completed and produce sellable products in the first half of 2019.

Latest Developments
Mustang Resources’ latest assay results for the Caula vanadium/graphite project continue to underpin a strong economic outlook for the project, with the miner noting that a maiden vanadium resource is due soon.

Mustang Resources announced last month that the latest assays showed more “outstanding” high-grade vanadium and graphite over extensive widths, with significant intersections close to surface.

The company drilled diamond holes MODD014, MODD015, MODD016 and MODD017 close to the previous five holes drilled in 2016, which resulted in the 2017 Joint Ore Reserves Committee- (Jorc-) compliant inferred mineral resource (at 6% cutoff grade) of 5.4-million tonnes at 13.0% total graphitic carbon (TGC) for 702 600 t of contained graphite.

Following initial work on Caula’s graphite, recent laboratory analysis also tested for V₂O₅, which led to the discovery of high-grade vanadium mineralisation within the Caula ore.

The latest assays indicate grades of up to 1.02% V₂O₅ and 24.2% TGC. The vanadium is hosted in a roscoelite-mica mineral within the graphitic schist; according to the miner, this is expected to result in simpler and cheaper vanadium liberation than in traditional magnetite-vanadium deposits.

According to Mustang Resources, the latest results, which come from drilling Fence Line 3, are considered important because of the significant widths and grades, particularly at current market prices for both commodities.

In light of these results, Mustang further expects to complete the maiden Jorc-compliant vanadium resource in coming weeks, which will be followed by feasibility studies. The company aims to undertake a fast-track development to Stage 1 vanadium and graphite cash flow from trial mining in mid-2019.

The initial metallurgical testwork has confirmed that Caula can yield high percentages of superjumbo, jumbo and large flakes (about 55% from the fresh ore), with carbon content of up to 98% through simple flotation (average of 97% carbon across all size fractions) and recoveries of up to 96%. Oxidised ore has also demonstrated excellent treatment characteristics.

Mustang Resources has highlighted that, during the past year, the supply and demand landscape for vanadium has changed “dramatically”, owing to several developments in China, such as more stringent minimum specifications for reinforcing steel used in buildings, as well as an increased demand for large-scale energy storage.

As a result, the price of vanadium has increased steeply, making it the best-performing battery metal of 2017. Therefore, Mustang Resources is working towards becoming a supplier of low cost vanadium and graphite to the markets.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Mustang Resource, tel +61 8 9217 2400 or email info@mustangresources.com.au.