[MEDIA] Graphex Mining (ASX:GPX)  has announced a resource...

Graphex Mining (ASX:GPX)  has announced a resource upgrade at their Chilalo Graphite Project in Tanzania.  Highlights of the upgrade include:

• High-grade resource – increased 80% to 16.9Mt grading 10.2% (TGC);
• Total resource  - 53.5Mt at 5.6% TGC for 3.0Mt of contained graphite; and   
• Exploration remains highly prospective as just 4km of the 54 km of strike, identified through EM surveys, have been tested.

Graphex also announced that offtake & financing negotiations with CNBM and China Gold (both State owned Chinese Enterprises) have continued with both parties making significant progress towards finalising a term sheet.

Analyst Comment:  Whilst the increase to the total size of the resource is pleasing, it is the increase to the high-grade section that we see as the more critical aspect, as this area will form part of the mine plan in the near term.  This along with the significant exploration potential that is yet to be tested (4km of 54 km of strike identified through EM surveys, all encountered graphite mineralisation) leaves us comfortable that Chilalo will be a long life graphite project.  

More importantly Graphex also appears to be drawing towards a positive conclusion regarding their offtake and project financing negotiations with CNBM and China Gold (both State owned Chinese enterprises).  Provided these negotiations are concluded (TSI estimate – 2Q17), the company will potentially have a significant re-rating aligning more closer to our current valuation.

The information in this email should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions. 

Valuation:  We have increased our valuation to $1.45 / share (share price $0.40 / share).    The increase to our valuation is due to extending our mine life assumption from 7Mt to 10.5Mt.  Full details of our Valuation & Investment Analysis can be accessed by watching the video. 

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