Metals of Africa MD Cherie Leeden in Q&A with Proactive Investors

Metals of Africa (ASX:MTA) is off to a flying start to drilling in Mozambique at the company's Montepuez Central Project which is located in the Cabo Delgado graphite province hot spot.

The mineral province is also home to Syrah Resources' (ASX:SYR) and Triton Minerals' (ASX:TON) world-class graphite and vanadium deposits.

Metals of Africa recently received the first three assays including a graphite intersection of 145.59 metres at 9.60% total graphitic content (TGC) and 0.12% vanadium from just 34 metres.

Tellingly this drill hole ended in high grade graphite mineralisation and is still open in all directions.

Proactive Investors is joined exclusively by Metals of Africa's managing director Cherie Leeden.


PROACTIVE INVESTORS: Welcome Cherie.


Firstly can you outline the current exploration plan and timeline and how this will be funded
   
Cherie Leeden: Following on from our initial better than expected 145 metre high grade graphite intersection (which remains open in all directions) we will recommence drilling at our Montepuez Central Project next week.

The aim of the drill program is to deliver our maiden JORC resource and we are working towards delivering an Indicated category resource; which can go onto be used in our PFS.

Our drill program will be complete in July and our resource estimate will follow shortly after we receive our lab results.

We have planned 5000 metres of drilling covering 40 drill holes and will update the market regularly during our work program.

We are focussing our drill program on the oxide component which is essentially the weathered zone that extends from surface to a depth of about 50 metres.

As a result we’ll mainly be drilling shallow holes (less than 70 metres deep). We feel that we can define more than an adequate size oxide resource to cater for the current graphite demand therefore will leave the deeper drilling for when we are cash flow positive if it’s ever required.

Within our Montepuez Central project there is also a major VTEM target that extends for more than 5 kilometres and boasts coincident outcropping high grade graphite on the surface.

This high priority target will be drill tested after the Buffalo drilling around June or July. We call this prospect ‘Elephant’ due to its mega EM signature and I’m really looking forward to drill testing its depth dimensions in a few months’ time. 

The company is fully-funded to deliver its JORC graphite resource.


With the Cabo Delgado graphite province hosting the biggest graphite deposits ever discovered has Metals of Africa been receiving cornerstone or institutional investor interest

Cherie Leeden: While it is only exploration days for MTA’s graphite project we have received initial interest from numerous parties spanning Europe Australia and Asia; wanting to know more about our graphite projects and our company’s plans.

The word is out that we’re intent on progressing to PFS rapidly and catching up to our competitors. We have strong relationships in country and the Mozambican government is supportive of what we’re doing so I expect our approval process to run quickly and smoothly.

Following on from Syrah and then Triton making the biggest graphite discoveries known investors appear to have interest in MTA because we are potentially leveraged to exploration success with our market cap circa $11 million.

Syrah is worth about 60 times more than this. Our aim is to catch up to our graphite competitors before they’re in production in order to deliver our shareholders maximum value.

MTA is fully-funded to deliver a JORC graphite resource.


Is Metals of Africa able to leverage off existing infrastructure

Cherie Leeden: Absolutely that’s one of the reasons why we are so bullish about our graphite project and is yet another positive that sets the Cabo Delgado Province above the rest from a global perspective.

The nearest port to our project is at Pemba and the Pemba port has existing capacity.

In addition the port of Pemba is about to get upgraded due to the hive of activity that the gas sector is generating. To get from our project to the port is a 250 kilometre drive.

For the most part this 250 kilometre road journey to the port of Pemba is on an all-weather well maintained bitumen highway from the town of Montepuez (circa 50 kilometres from Montepuez Central).

Pemba is accessed via regular direct international flights and is gaining international attention as home to the world’s fourth largest offshore gas reservoir which has given rise to a lot of recent development.

The province boasts existing water and power supply which makes developing a mining operation a genuine possibility.
Currently onsite managing our project we have our Exploration Manager Steven Cancio-Newton and valued geological consultant Peter Buckle of Gnomic Exploration.

Buckle brings a wealth of Mozambican graphite experience having also worked for nearby Syrah Resources when they were at a similar stage.

Peter Buckle adds “MTA’s Buffalo prospect has excellent potential for a high grade and large flake graphite deposit”


For those investors not familiar with Mozambique what is the operating environment like in the country

Cherie Leeden: Tellingly I have spent many years living in Mozambique and feel completely comfortable with the countries sovereign risk and stability.

A peaceful democratic federal election was held last year. The new President and Mines Minister are pro-business and development and have welcomed MTA’s rapid graphite project development plans.

Sourcing skilled mining and exploration staff is readily available due to the current depressed coal price which has resulted in numerous redundancies of skilled Mozambicans from the Tete province coal sector.

We ensure that all of our contractors adhere to best practise when it comes to environmental protection and a firm commitment to safety. It’s important for us to do our part with respect to community development and on that note we donate water bores to remote villages which improves the lives of hundreds.


Finally how can Metals of Africa potentially monetise the project

Cherie Leeden: It’s all about the oxide. A billion tonnes is irrelevant given the current market so we’re going to focus on what matters which is defining a minable reserve in the oxide zone. To date our Buffalo Project oxide material is grading at 14.75% from near the surface.

Ultimately the lowest cost production and the highest grade material is found in the oxide zone which is from surface to a depth of about 50 meters.

MTA is all about the oxide zone so this is why we’re drilling 50 metre holes instead of 350 m deep holes. Drilling the oxide zone also equates to a lot quicker turnaround time from the drilling phase to the BFS stage plus it’s so much cheaper than drilling deep holes for the sake of a big resource number.

What’s next for MTA is:

We are working towards fast tracking our project to get our graphite product to market. In short the next steps are:

- Define JORC Resource and conduct detailed metallurgical test work Q3 2015.
- Rapidly and cost effectively advance project to PFS during 2H 2015.
- In parallel to the above advance R&D and offtake opportunities.


PROACTIVE INVESTORS: Thank-you Cherie.


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