News: Paradigm Metals joins the ranks of graphite explorers

Paradigm Metals (ASX:PDM) should trade higher after it entered into an agreement to acquire up to 80% of the Caninde Graphite project in Brazil.

This is a growth opportunity for PDM with considerable work already completed on the project.

The company is currently compiling existing data and will look to commence an aggressive drilling program in the coming months.

Existing data shows massive flake graphite with surface assays as high as 42.04% Cg and trenching results up to 25.3 metres at 13.29% Cg, including 9.3 metres at 20.76% Cg.

Brazil is both a leading global producer and end user of graphite, so necessary infrastructure is in place to extract and sell graphite a low cost to PDM.

The project is even transected by a highway.

Geologically, the project lies within the paleoproterozoic Ceara Complex which includes amphibolites, mica and graphite schists, quartzites, metalimestones, and gneisses.

To date, three main types of Graphite occurrences have being recognised within the project.

Type 1 is represented by stratabound massive graphite bands or graphite-rich beds with thicknesses to several metres and grades from 5% to 20% Cg, suggesting the best targets in terms of tonnage.

Type 2 comprises disseminated low grade graphite-bearing mica-schists with grades ranging from 0.2% to 2% Cg, and type 3 is related to massive graphite lenses with grades from 15 to 35% Cg.


Acquisition terms

PDM will make staged payments totalling US$700,000 and fund a minimum US$4.5 million of exploration and development work and to bring the project into production.

PDM can earn an initial 51% of the project, followed by an additional 19% interest, based on staged payments and milestones.

When the PDM has delivered a Bankable Feasibility Study, Environmental Permitting and applied for a Mining License to earn its additional 19% interest, it may earn the final 10% interest for a total of 80% by paying US$100,000 and putting the project into commercial production within 72 months of the agreement date.

PDM is currently capitalised at around $1.5 million.