GreenRock Energy (ASX:GRK) should trade firmer after signing an option to acquire three new tenements around the Mahenge Graphite Project in Tanzania.
Two of the three new tenements have significant existing graphite bands mapped with the Tanzanian Geological Survey mapping indicating a 4 kilometre and a separate 1.75 kilometre band of graphite mineralisation.
Potential graphite mineralisation has been identified within a number of prospective horizons totalling close to 50 kilometres of strike.
The option allows Green Rock to increase its total area at Mahenge to 675 square kilometres, with on-site due diligence to commence this week.
The Mahenge Projects provide potential for rapid and cheap transformation from discovery, through to resource definition to scoping and off-take, and GRK's objective is to further increase its tenure in Tanzania.
Consideration for the option is a non-refundable cash payment of $50,000 and the issue of 8,000,000 Green Rock shares.
Green Rock is provided an exclusive due diligence of four months to explore the Mahenge Projects with a commitment to spend a minimum of $20,000 during this period.
In the event that Green Rock elects to exercise the option it will issue 80,000,000 Green Rock shares to the vendors of the Mahenge Projects, and commit to spend a minimum of $500,000 in the first months.
Certain milestone payments are also scheduled.
Geological due diligence, mapping, trenching and rock chip sampling is expected to be completed by mid-September.
Green Rock remains one of the cheaper entries into the ASX-listed graphite space at a capitalisation of $9 million.
Notably, the Mahenge projects lie directly north of the Epanko Graphite Resource held by Kibaran Resources (ASX:KNL) which contains a JORC Inferred Resource of 14.9Mt at 10.47% TGC.
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