(MENAFN - ProactiveInvestors - Australia) Buxton Resources (ASX: BUX) has picked an opportune time to make its foray into the extremely hot graphite market, with the company set to acquire an 85% stake in Montezuma Mining Company's Yalbra Graphite Project in Western Australia.
The company has exercised an option to acquire 85% of the project in exchange for 1 million Buxton shares, which have increased in value since the company announced it had purchased an option over the project to acquire the interest earlier this month.
Buxton shares last traded at around 0.13 valuing the transaction at around 130,000, compared to the 95,000 it was valued at when the company first made the announcement, highlighting the strong market reaction to the value of graphite.
Montezuma will retain a 15% free-carried interest up to a decision to mine, following which the company can elect to contribute on a pro-rata basis or dilute to a 1% gross revenue royalty.
Wide, high grade, near surface zones of graphite mineralisation have been identified over 4 kilometres of strike in historical trenches and drilling at Yalbra.
Buxton is planning a field work program to follow up on historical percussion drilling results, which include:
- 16.8 metres at 13.2% carbon from 15 metres, including 6.1 metres at 17.2% carbon;
- 23.5 metres at 19.5% carbon from 9 metres, including 15.2 metres at 25/2% carbon; and
- 39.6 metres at 10% carbon from 3 metres, including 12.2 metres at 23.6% carbon.
The company has begun discussions with traditional land owners and pastoralists which will pave the way for the start of its field program.
Buxton has set an exploration target for the project of between 8 and 12 million tonnes at 7% to 11% carbon.