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 of developing 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 the 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 offtake 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 from 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 has reported a maiden Joint Ore Reserves Committee-compliant resource of 22-million tonnes at 0.37% V₂O₅, at its Caula vanadium/graphite project.

The Caula project is currently estimated to host 81 600 t of V₂O₅.

The entire vanadium resource is classified as measured, and is subdivided into the oxidised zone, which contains 8.9-million tonnes, and the fresh zone, which contains 13.1-million tonnes.

The vanadium resource is in addition to the graphite resource at Caula, which is currently estimated at five-million tonnes at 13% total graphitic carbon.

Mustang MD Bernard Olivier has said that the potential of the project is even greater as the vanadium is mica-hosted, associated with graphite mineralisation and potentially far cheaper to extract and recover through two simple processing steps, compared with most vanadium projects, where the vanadium is located in a complex titaniferous magnetite orebody.

Mustang agreed to a A$10-million merger of its resource assets in Mozambique earlier this month, with those of TSX-V listed Fura Gems to focus on the Caula project.

Key Contracts and Suppliers
TOMRA Sorting (preliminary ore sorting testwork).

On Budget and on Time?
Not stated.

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