Mustang said the results confirmed Caula, along strike from Syrah Resource’s Balama graphite project, was a tier 1 project with more than half of its graphite classed as jumbo and large flake.

“These results highlight the potential for Caula to be a low-cost graphite supplier to the fast-growing lithium battery and expandable graphite industries,” managing director Christiaan Jordaan said.

He said the initial results were based on non-optimised testwork and there was further scope for optimisation through a coarser initial grind size and increased flake preservation during intermediate processing.

The tests produced high-grade concentrates above 95% total graphitic carbon and recoveries of up to 96%.

The samples had a head grade of about 13% total graphitic carbon which Jordaan said put Caula in a unique position of hosting both high-grade, shallow graphite as well as exceptional flake size distribution, recoveries and concentrate grades.

The company aims to release its maiden resource by September and expects to start work on a scoping study in August.

Mustang finished the March quarter with $3.1 million cash on hand and earlier this month raised $8.5 million in a convertible note, to ensure the company was fully funded until the first sale of rubies from its Montepuez project scheduled for October.