{australien_flagge}Many EcoGraf Limited (ASX: EGR; FRA: FMK; OTCQX: ECGFF) shareholders may not have been aware that Ecograf has a history as a nickel explorer in Tanzania. Between 2010 and 2014 – well before the company turned to battery graphite or even down-stream processing – management estimates that about A$6 million to A$7 million was spent on nickel exploration. Based on the considerable wealth of data Ecograf has acquired in the process, the company has secured a number of strategic nickel properties in Tanzania over the past 12 months.
As of today, Ecograf has the largest nickel exploration package in Tanzania, totaling 4,600 k²! The areas are located in one of the most interesting nickel regions in the world. They cover 140 km of continuous strike length in the Karagwe-Ankole belt, which hosts the world-class Kabanga nickel project
Against a backdrop of soaring nickel prices and the entry of BHP Billiton into the major Kabanga Nickel Project, Ecograf now intends to bring its nickel properties to the market through the Initial Public Offering (IPO) of its subsidiary Innogy Limited (Innogy). The prospectus with the details is still being written. However, it is already certain that EcoGraf itself will be a major shareholder in Innogy in the future. In parallel, EcoGraf shareholders will receive a priority offer to subscribe to the new Innogy shares.
The planned IPO also unlocks for shareholders the value of the extensive nickel database held by Ecograf. This includes geological mapping, geophysical surveys, geochemical analysis and exploration drilling spanning a total of 10 years. Innogy will also benefit from EcoGraf’s extensive operational experience in Tanzania. And Ecograf will leverage its established relationships with electric vehicle and lithium-ion battery manufacturers.
Ecograf has appointed Canaccord Genuity as lead manager for the IPO. The IPO will include a priority offering to eligible EcoGraf shareholders, followed by a public offering supported by EcoGraf as a major shareholder.
Figure 1: Project Location
An independent geological survey has identified prospective target areas for nickel sulphide exploration within the ground package. In addition to nickel, all Frontier projects are also prospective for gold and other cathode minerals. Innogy’s initial focus will be on the Northern and Southern Frontier projects.
Ecograf provides the following summary of the four projects:
Northern Frontier Nickel Project
The Northern Frontier Nickel Project is located within the Karagwe-Ankole Belt and along strike from the world-class Kabanga Nickel deposit, which is owned by Kabanga Nickel Ltd. and is the largest developable high-grade nickel sulfide deposit in the world. The Karagwe-Ankole belt has similar geological characteristics to other Proterozoic orogenic belts around the world, including the Circum-Superior belt in Canada, which hosts the Raglan, Thompson and Voisey’s Bay Ni-Cu deposits, and the Albany-Fraser belt in Western Australia, which hosts IGO’s recent Nova-Bollinger discovery. Northern Frontier is under-explored by many standards and has not yet been explored using modern exploration techniques and knowledge.
Southern Frontier Nickel Project
The Southern Frontier nickel project is located in southeastern Tanzania, southwest of EcoGraf’s Epanko graphite project. Southern Frontier shares the same geological setting as the Ntaka Hill nickel-sulfide deposit in southeastern Tanzania, which has many similarities to the Thompson Nickel Belt in Canada. The project area is considered highly prospective and underexplored.
Western Frontier Nickel Project
This is an underexplored nickel sulfide project at the southern end of the Kabanga-Musongati-Kapalagulu axis. The project is located 95 km southeast of the Kapalagulu nickel deposit and has not been adequately explored. The two northern concession applications focus on the historic Kabulwanyele nickel laterite gossan deposit overlying an ultramafic intrusion. Several historic gold occurrences within the properties.
Golden Eagle Gold Project
The gold project is located m the eastern edge of the Lake Victoria Archaean goldfields with a gold tonnage of 70 million Moz. It is located in the same structural corridor as the Golden Pride Mine. The project covers an area where a number of gold occurrences have been previously defined. The gold in this area is contained in veined shear zones within banded iron formations (BIF).
Conclusion: Ecograf has cleverly used its hard-earned knowledge advantage in Tanzania to put together – largely unnoticed – a considerable bouquet of nickel and gold projects. 4,600 square kilometers is no mean feat. So the millions and millions of dollars that flowed into nickel exploration years ago are bearing fruit for shareholders after all. This is smart, but also opportunistic in the sense that the nickel story could hardly come at a better time. The nickel price is one thing, but the signs for the large-scale Kabanga nickel project are also green following BHP’s entry. And in other respects, too, the investment climate in Tanzania has improved greatly under the new president. It would be desirable for Ecograf to repeat its graphite success with Innogy with the commodity nickel. The chances for a successful IPO are not bad at all at the moment. We are now looking forward to the prospectus, which will contain the details of the offer.
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