Green Rock Energy (ASX:GRK) will trade higher after signing an...

Green Rock Energy (ASX:GRK) will trade higher after signing an Exclusive Option Agreement for acquisition of the Mahenge North Graphite Project in Tanzania from Asab Resources.

Notably, the project lies directly north of the world class Epanko Graphite Resource held Kibaran Resources (ASX:KNL) containing a JORC Inferred Resource of 14.9 million tonnes at 10.47% TGC.

The tenure covers 292 square kilometres over one of the most prolific graphite districts in Tanzania with many known graphite occurrences and favourable geological characteristics.

Previous exploration has already identified two graphite prospects in Ndololo and Epanko North Graphite with reported flake sizes ranging between 1.5 and 8.5 mm in size.

A historic metallurgical studies completed at Mahenge and Ndololo yielded a 95.7% recovery from a sample with a 15.5% carbon head grade, and coarse flake graphite potential with ~70% of crushed sample material with a size greater than 500 microns.

This project provides potential for rapid and cheap transformation from discovery, through to resource definition to scoping and off-take agreements.

Under the terms of the option agreement, Green Rock has been granted a four month exclusivity period to complete due diligence.

During this period, Green Rock has committed to spend a minimum of $100,000 on exploration activity and due diligence
investigations.

The Company has prepared a technical and commercial program to evaluate the opportunity and will be mobilising a field team to commence ground activities by the end of the month.

Completion of the transaction will be subject to the receipt of Green Rock shareholder approval.

In the event that Green Rock elects to exercise the Option, the Company must issue 166,666,667 fully paid Green Rock shares to the vendors of the Mahenge North Project.

Green Rock must also commit to spend a minimum of $500,000 on the Mahenge North Project in the first 12 months from exercise of the option, and make certain milestone payments as required.

The company is capitalised at around $3 million.