Drilling results are in - new graphite discovery made
Earlier this morning , our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) announced that it had made a new graphite discovery.
EV1 became our pick of the year primarily due to its shovel ready, DFS level graphite project in Tanzania - the DFS was updated back in March and showed attractive project economics, in particular its NPV of US$338M.
Typically when projects are at the DFS stage, companies don't need to do any further drilling, BUT sometimes it pays to test high priority targets because new discoveries could mean:
- Decreased costs - If shallow high grade material is found, it can be added into the mine plan, reducing costs and allowing for more valuable graphite to be mined quicker.
- Increase in life of mine - If high grade material is found, it can be added to the company's JORC resource base and extend the project's life (adding it to the back end of production).
In EV1's case, we have a combination of both factors, with EV1 making a new graphite discovery to the east of its existing JORC resource.
The highest graphite grades from the drill program were ~13.7%, the thickest intercept was ~26m, and the shallowest hit came from surface.
The discovery sits on ~1.6km out of a potential ~3.5km strike length (based on EM conductors).
Going into the drill program, we chose not to put any expectations for the drill program, instead treating these results as a bonus if they came back positive.
Today's results are welcome news leading up to what we hope is a Final Investment Decision (FID) for EV1.
What's next for EV1?
- Final Investment Decision (FID) 🔄
- BONUS: Feasibility study on a downstream plant 🔄
