Mason Graphite sees giant increase in Lac Guéret resource

Thu 11:59 am by Deborah Bacal

The company highlighted that even the newest mineral resource estimate is based on drill data from just the GC Zone, which represents only one of two mineralized zones identified on the Lac Guéret property to date. While the GC zone remains open in all directions, there is also the GR zone, where only 18 holes have been drilled so far.

Mason Graphite (CVE:LLG) (OTCQX: MGPHF) has boosted its resources substantially at its Lac Guéret graphite project in northeastern Quebec on the back of recent drilling, by some 658%, the company announced today.

The measured and indicated resource has increased to 50 million tonnes from 7.6 million tonnes, according to a statement released just moments ago, while inferred mineral resources jumped to 11.9 million tonnes from 2.8 million tonnes.

The overall measured and indicated grade is 15.6% graphitic carbon (Cg), suggesting the main parameters of the preliminary economic assessment report from April are still valid, the company said. These include 22 years of production at a grade of 27.4%, with a low stripping ratio of 0.76:1 and operating costs of $390 per tonne.

The enlarged resource could even lead to a more optimized pit design and improved economics in the next phase of technical studies, Mason said.

The newest resource, calculated by Roche Consulting Group, included data from 170 drill holes in the GC zone. The measured and indicated resource also includes some 6.67 million tonnes grading a whopping 32.4% Cg, while the inferred estimate incorporates a higher grade 2.64 million tonnes at 30.5% Cg.

“We are very pleased to see the success of our 2012 drilling program materialize in this updated mineral resource estimate”, said president and CEO Benoît Gascon.

“We expect the scale of growth of our project to positively impact what is already expected to be an economical project. Results from the Lac Guéret Project continue to reinforce our belief in the world-class potential of this asset.”

Gascon is not the only one with this conviction. The company has been lauded for its achievements lately, with Jim Rogers calling the junior developer in a recent interview with Bloomberg the best graphite play there is at the moment.

When asked how he is invested in the space, Rogers, chairman of Rogers Holdings, pointed to his stock options in Mason Graphite, "a Canadian company that apparently has the purest graphite deposit in the world and is run by the world's experts...people who have been in the graphite business a long time."

Indeed, the graphite play is headed by Benoit Gascon, who has held executive positions, including CEO, at Stratmin Graphite, one of North America's only producing graphite mines and the only one still in operation today. In 1996, he negotiated the takeover of Stratmin Graphite to form Timcal Graphite & Carbon, and remained on to run the new production company.

Mason, which has in recent months also drawn attention from such high profile media figures as Larry King, has come a long way since acquiring its Quebec project in April of last year, providing now two NI 43-101 compliant resource estimates and a preliminary economic assessment that was based on data up until July 2012.

The company highlighted that even the newest mineral resource estimate is based on drill data from just the GC Zone, which represents only one of two mineralized zones identified on the Lac Guéret property to date. While the GC zone remains open in all directions, there is also the GR zone, where only 18 holes have been drilled so far.

It said it expects "the scale and grade of the new mineral resource" to positively affect the project economics in the upcoming feasibility study. The company's goal is to advance the project with the aim of becoming a graphite producer as quickly as possible, showing purities of 99.9% Cg from preliminary metallurgy tests at the asset. It anticipates wrapping up the feasibility study by the final quarter of next year.

Shares of Mason were halted this morning pending the news of the updated resource, and resumed trading shortly after the announcement. The stock closed yesterday in Toronto at 39 Canadian cents.