Mustang Resources drilling intersects high-grade graphite and vanadium at Caula project in Mozambique
Friday, Mar 16, 2018
Mustang Resources Ltd is pleased to announce good drilling results from its Caula Graphite and Vanadium Project in Mozambique.

Key Points

- High-grade results over extensive widths from the latest diamond drilling program at Caula Graphite and Vanadium project (Licence 6678L)

- Assays show grades of up to 24.2% Total Graphitic Carbon (TGC) and 1.02% Vanadium (V2O5)

- Results from 1m composite samples include:

o 125m (from 17m downhole) at 14.1% TGC average (incl. multiple intersections from 23 to 24% TGC); including

-- 96 m downhole at 24.2% TGC

-- 52 m downhole at 23.9% TGC

o 125m at (from 17m downhole) at 0.42% V2O5 average (incl. multiple intersections from 0.7% to 1.02% V2O5); including

-- 74m downhole at 1.02% V2O5

-- 71m and 75m downhole at 0.98% V2O5

- Caula being established as one of the world's highest-grade graphite and vanadium projects

- New strategy focused on fast-tracking a dual graphite and vanadium development to deliver first cashflow in H1 2019

- Vanadium assay results to be included in an updated graphite and vanadium development strategy announcement

Using diamond core drilling, Mustang drilled MODD014 in close proximity to the previous five holes drilled in 2016. Assay results from MODD014 include outstanding intersections up to 24% TGC and 1.02% V2O5 with an average grade of 14% TGC and 0.42% V2O5 over 125m from 17m downhole including:

- 96 m downhole at 24.2% TGC

- 52 m downhole at 23.9% TGC

- 74m downhole at 1.02 % V2O5

- 71m and 75m downhole at 0.98 % V2O5

Mustang Resources Managing Director Dr Bernard Olivier said the latest results would strengthen the impending Resource upgrade at Caula.

"Caula goes from strength to strength, as these new results show," Dr Olivier said. "We have very high graphite grades, substantial widths and a very significant proportion of large and jumbo flake sizes.

"Now, in addition to the outstanding graphite mineralisation, we are establishing the presence of substantial vanadium mineralisation.

"We look forward to updating the graphite Resource and including a maiden Resource estimate for the vanadium.

"This will in turn form part of the Concept Study now underway at Caula."

Diamond Hole MODD014 Assay Results

Based on the sampling completed on the DD samples in 2017, drill hole MODD014 on licence 6678L has an average of 14% TGC within a 125m (from 17m to 143m) mineralised graphitic zone (downhole width). A total of 65 samples returned results above 15% TGC including high grade zones of 18m at 19.03% TGC from 86m to 104m (downhole depths) and 11m at 17.28% TGC from 44m to 55m. These results confirm the high-grade nature of the Caula deposit and establishes the project in the top quartile high-grade large flake graphite deposits globally. Importantly, the graphite mineralisation is shallow with high grades close to the surface, including 19% TGC at 17m. The highest TGC value recorded for this hole is 24.2% TGC at 96m below surface.

Based on the sampling completed on the DD samples in 2017, drill hole MODD014 on licence 6678L, has an average vanadium pentoxide (V2O5) grade of 0.42% within a 125m (downhole width from 17m to 143m) mineralised zone (downhole width). A total of 56 samples returned results above 0.4% V2O5 including high grade zones of 20m at 0.70% V2O5 from 68m to 88m (downhole depths) and 8m at 0.56% V2O5 from 90m to 98m (downhole depths; as seen in Appendix 2 in link below). The highest vanadium value recorded for this hole is 1.02% V2O5 at 74m below surface.

Project Area Potential

The Caula Project is located within a world-class graphite province and as previously indicated there is significant potential to expand the maiden JORC Inferred Mineral Resource estimate of 5.4 million tonnes at 13% TGC (6% cut-off) through ongoing exploration and drilling.

The results of the completed diamond drilling campaign are expected to expand the current JORC resource and provide insight into the down-dip and eastern extensions of the Caula deposit and enhance confidence in the continuity of the defined mineralisation.

Broad zones of mineralisation were identified during the original sampling program. The lithological logging has indicated an extension of mineralisation eastwards.

The Caula discovery is located at the northern end of a suite of large-scale geophysical (TEM) anomalies that extend over an 18km strike length within Mustang's tenements (see Figure 5 in link below). Drilling at the Caula site confirms a strong spatial correlation between the TEM anomaly and high-grade graphite and vanadium mineralisation in drillhole intersections. The larger-scale TEM anomaly has received minimal drilling to date and therefore remains largely untested.

The Company estimates that, subject to the final results of the Concept study, it can fast track the project development through a two-stage development strategy which will deliver a marketable graphite and vanadium product in H1 2019 from Stage 1. The Company plans to incorporate the average vanadium assay results of 0.42% V2O5 over 125m (from 17m downhole) into a revised graphite and vanadium development strategy update.

For more information, please visit: http://www.mustangresources.com.au

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