Archer Exploration (ASX:AXE) looks to the future

By Jonathan Jackson. Published at Nov 4, 2015, in Mining

In a recent and wide-ranging interview with Market Briefing, Archer Exploration (ASX:AXE) Chairman Greg English outlined the company’s strategic direction and current project developments.

Archer Exploration owns the largest JORC 2012 graphite resource in Australia and according to Mr English, AXE’s tenements have significant potential for further increases in the size of its resources.

Mr English said, “The nature of our deposits provide us with a wide spread of flake sizes, and various forms of graphite that give rise to a variety of potential end market users.

“We have identified two immediate potential projects, with the prospects of a third as we progress.”

Those projects are the initial Campoona Shaft graphite project, which is the basis of the battery grade graphite exploration, the Sugarloaf deposit which provides a massive outcropping deposit with an exploration target of 40 to 70 million tonnes of graphite at 10% to 12% carbon and a third potential project that exists in the recently acquired Waddikee tenements – a long-term play which also contains large flake graphite.

Archer has 100% of 13 granted tenements all in South Australia covering almost 4,954 km2 over Eyre Peninsula, Leigh Creek, Burra, Wilmington and Australia Plains areas.

When we last covered AXE they had just signed a Heads of Agreement with the Board of Leigh Creek Energy Limited (ASX:LCK) to explore synergies within their respective Leigh Creek Projects where its major magnesite resource resides.

AXE currently holds 100% ownership over the world’s largest cryptocrystalline magnesite resource at Leigh Creek, totalling 453 million tonnes with a grade of 41.3% MgO.

At current estimates, AXE controls over 50% of the world’s Magnesite reserves.

Mr English said the Leigh Creek project is moving in a very interesting direction.

“Our proposed project is to produce magnesia, which is magnesium oxide. It has a huge variety of applications and can be readily produced through heating the magnesite at high temperatures. The magnesite deposit is vast with the potential to support a mine life in excess of 100 years.”

However, it is the graphite deposits that are garnering the most attention.

AXE has put a lot of time and resources into pulling together its Campoona Shaft Mining Lease. To do so, they have conducted numerous studies into the technical, environmental and social aspects of the project and included widespread consultation with local farmers and government. The project has all necessary infrastructure in place.

As you can see by the illustration below the technical aspects are positive.

There are high expectations for the Campoona Shaft project

Formal approval for the Lease could take up to six months and during this time AXE will undergo the next phase of its battery testing.

Meanwhile AXE is working closely with University of Adelaide to research proof of concept for the potential application of Sugarloaf carbon.

The research has shown the carbon has unique qualities that underscore its potential as a sloil conditioner and slow release fertiliser.

To push these projects further, AXE recently received $1.5M R&D refund from the Australian Taxation Office (ATO). With the Company pushing down its operating costs, Mr English said it could run with that money for the next 8-12 months.

However he is not ruling out pursuing other projects as they come along that will create significant shareholder value.

In the meantime it is full steam ahead for Archer Exploration as they test their Campoona graphite against commercially available lithium iron-battery lithium quality graphite.

AXE is aiming to be a boutique producer of high grade graphite and in the next six months aims to crystalise its opportunities.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Facebook
Twitter
LinkedIn