MRL Corporation has signed a Heads of Agreement to acquire the rights to the high-grade Aluketiya Graphite Mine in Sri Lanka. Under the agreement, MRL will acquire the lease covering Aluketiya, giving it the right to explore, develop and mine the graphite.
MRL will pay a lease fee of US$3500 a month during the exploration phase. Upon the start of production, MRL will pay a 10% royalty which will be based on sales.
Aluketiya is in Meegahatenna in the Walallawita district, about 85km from Colombo. Meegahatenna is considered to be the richest graphite-bearing area in Sri Lanka, with the graphite veins extending for long distances.
The acquisition complements and expands MRL’s extensive portfolio of high-grade vein graphite licences in Sri Lanka, where it is aiming to develop multiple small-scale production hubs.
Aluketiya produced high-grade graphite for several decades until the operation was stopped in the 1960s. Extensive veins of high-grade graphite are visible from surface but the area has not been subjected to any modern exploration techniques.
MRL will seek to establish the extent of this high-grade graphite mineralization as part of a drilling program due to start in late 2014. However, MRL does not intend to drill Aluketiya to the point of being able to calculate a JORC-compliant resource estimate and will instead aim to begin production as soon as possible.
MRL managing director Craig McGuckin says historical records indicate that the graphite was of such high grade that the material would be direct-shipping quality. “We are aiming to develop a high-grade, low-cost mining operation in the shortest timeframe possible.
“Based on what we know, the cost of getting into production will be extremely low and therefore there will be no need to spend the time and money establishing a JORC-compliant resource. The fact that Aluketiya is already covered by a Mining Licence is immensely valuable because not only will it enable us to start production quickly, it will also underpin our applications for other approvals such as transport and export licences.”
Meanwhile, MRL has received outstanding final assay results for two previously reported high-grade vein graphite intersections from the maiden diamond drill hole at its rapidly emerging vein graphite project in Sri Lanka. The results from a diamond drill hole in the Pandeniya Priority 1 Area within the Warakopola Project Area in central Sri Lanka included extremely high-grade graphite intersections over two intervals.
Individual results as high as 97.8% TGC (Total Graphitic Carbon) were returned with the first intersection, from 91.62 to 92.32 metres, averaging 94.1% TGC while the second interval, from 97.0 to 97.9 metres, averaged 97% TGC.
Craig McGuckin says, “The results confirm the presence of extremely high grade vein graphite within the Bopitiya/Pandeniya Priority 1 licence. These results will assist in the planning towards conversion of this licence into an Industrial Mining Licence following further drilling.” www.mrltd.com.au