Volt Resources Ltd's (ASX:VRC) shares have traded 12% higher at A$0.028 in morning trade following confirmation that graphite concentrate from the company's Namangale project is suitable for a wide array of expandable graphite applications.
This enhances the scalability and commercial viability of the entire Namangale deposit as a primary expandable graphite supplier.
The results are timely given the recent offtake and cooperation agreements signed by Volt.
Trevor Matthews, chief executive officer, commented: "These results provide Volt’s metallurgists and engineers with a more flexible platform to efficiently optimise the most economic development and operation plans for Stage 1 and Stage 2 production across the entire Namangale deposit."
The tests were done by a German metallurgical laboratory.
Volt recently signed its fifth offtake agreement this year filling 100% of proposed Stage 1 capacity from Namangale.
The company signed a non-binding offtake term sheet with Qingdao Tianshengda Graphite for 10,000 tonnes per annum of flake graphite product from Stage 1 production.
This is the fourth agreement that Volt has signed with a Chinese graphite group since management completed a successful product marketing trip in May 2017.
Volt confirms that recent changes to Tanzania’s mining laws have not deterred customer’s confidence in management’s ability to start production at the Namangale project by mid-2018.
Today's outcome is very positive for Volt, as it means the mine plan can be optimised to source ore from any part of the project mineral resource to meet customer demand for expandable graphite.
Demand for expandable graphite is increasing significantly, primarily for its non-toxic flame retardant qualities and coupled with the reduction in supply from Chinese mines.
This is creating an increase in graphite prices.