Triton Mineral Ltd yesterday released significant new news regarding the discovery of very significant graphite intercepts on its Nicanda Hill prospect. It detailed Diamond drill hole (GBND0001) intercepting a 316m graphite mineralisation from close to surface, finishing in graphite mineralisation and remains open at depth. Based on drilling completed, the mineralised zone is likely to deepen beyond this depth and extend further northwest where the zone is open. Graphite mineralization appears visually similar to graphite schist intersected in previous diamond drilling on the prospect. The horizontal width of the graphite mineralization at surface is 750m andalso remains open to the northwest. The drilling results continue to correlate well with the VTEM survey data. The graphite mineralisation at Nicanda Hill has now been intersected over a strike length of 1.75km between drilled holes and trenches. The damond and RC drilling program is continuing to drill test within the +5km long conductive zone defined in the VTEM survey data.
Our view: This quite astonishing news from Triton appears to confirm the finding of Beaufort's research note of 28th January 2014 'Triton Minerals – The Next World Class Graphite Discovery'. Indeed, the northern most Mozambican province of Cabo Delgado appears to hold several world-class deposits! Operating in the region, Syrah Resources' (ASX:SYR) own Balama Project is now finalising its feasibility studies. Its ore body has been calculated to contain a huge global inferred resource of 1.15Bt @ 10.2% TGC and 0.23% V205. Being equivalent to 117 million contained tons of graphite, this claim alone appears to hold more than the world's entire reserves of the mineral along with discovered vanadium some six-times the size of the world's largest operating deposit. Syrah's prospect sits neatly between Triton's own Balama North and Balama South tenements, which are just a few kilometres away. Samples from the latest diamond drilling, suggest much more than just obvious similarities (in terms of location, composition and grading). Indeed, it will now be something of a surprise if it is not formally established that they are part of the same system of mineralisation. With a JORC-compliant Resource Estimate anticipated from Nicanda Hill by early 2015, the positive news looks likely to keep coming. When originally modelling this opportunity, Beaufort prudently adopted a 20% discount rate in order to create a net present value ('NPV'). This provided a price target of A$0.28/share for Triton. The latest news, the JORC for Cobra Plains (achieved in February) and further anticipation of a much larger complaint resource within six months or so, suggest the discount rate can now be sharply reduced. Based on same criteria/parameters, but using a 14% discount rate, Beaufort's price target has risen to A$0.50 and our Speculative Buy rating is sustained. Assuming the JORC release emerges in line with expectations, Beaufort would likely trim this rate further to around 9%, which suggests upside for the shares as high as A$0.90."
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TON Price at posting:
36.5¢ Sentiment: LT Buy Disclosure: Held
