Graphite Find Sends Talga Resources’ Share Price Up 9.09%

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Shares in Perth-headquartered graphite miner Talga Resources Ltd [ASX:TLG] are trading 9.09% higher today at 48 cents per share.

The company owns graphite, iron, copper/gold projects in Sweden and gold projects in Western Australia. However, it is currently divesting its Australian gold projects to focus on its Swedish projects.

Related: Discover why this ‘Nano Metal’ could soon be Australia’s most valuable export.

What’s caused Talga Resources’ share price to rise?

Just under a month from its previous drilling update, TLG has announced more promising results from the Niska prospect of its Vittangi Graphite project.

A total of 28 exploration diamond drill holes for 3046.5m were completed at the prospect, targeting a series of electro-magnetic and outcropping targets.

The results indicate a particularly wide and high-grade graphite resource with highlights including 72.0 metres at 29.9% graphite (Cg), 73.0 metres at 29.7% Cg, and 106.4 metres at 25.5% Cg.

Talga Resources' share price

Source: newswire

Talga Resources' share price

Source: newswire

Today’s results build on last month’s already strong results. Managing Director Mark Thompson described the results as a grade and width of graphite rarely seen anywhere in the world.

The Vittangi project already contains the largest, highest grade graphite mineral deposit in Europe and these new zones add potential for numerous larger scale and longer life development options.

We look forward to exploring how this discovery can add even more value to our planned integrated graphite anode production facility in northern Sweden, to be built on the doorstep of the Li-ion battery mega-factories underway in Europe.’

The company said that work on defining the maiden JORC-compliant mineral resource estimate for Niska will now commence, along with metallurgical and anode product test work.

What’s next for Talga?

TLG’s most recent pre-feasibility study places the value of the project at US$1.056 million before tax, with an internal rate of retune of 55%. Life of mine currently stands at 22 years of fully purified, shaped and coated li-ion battery graphite anode product to the emerging European battery supply chain.

Today’s high-grade discovery, coupled with the strong results in June, has the potential to push the value of the project even higher. Margins for the project currently stand at an estimated US$1,852 per tonne, but higher-grade ore — indicated in today’s results — has the potential to push these costs down and push margins higher.

Talga will commence stage 1 of its definitive feasibility study in mid-2020, with production expected in early 2021.

More to come.


Ryan Clarkson-Ledward,
For Money Morning

PS: If you want to get our extended look at the graphene/graphite sector, be sure to download our free report, titled ‘Three Stocks to Profit from a Versatile Material: Graphene.’

About Ryan Clarkson-Ledward

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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