An initial estimate for Atlas Critical Minerals’ (Nasdaq: ATCX) Malacacheta project in Brazil positions it as South America’s largest compliant, publicly reported graphite resource. Shares rose.
The estimate gives Malacacheta 17.2 million indicated tonnes grading 5.73% graphitic carbon (Cg) for about 986,000 tonnes of contained graphite. That grade is about 25% higher than Graphite One’s (TSXV: GPH; US-OTC: GPHOF) Graphite Creek project in Alaska, the largest graphite resource in the United States.
Malacacheta also hosts 7 million inferred tonnes at 5.4% Cg for around 378,000 tonnes, Atlas reported Tuesday.
‘Milestone for supply’
“This resource is a defining milestone for Atlas Critical Minerals and, we believe, for graphite supply in the Americas,” CEO Marc Fogassa said in a release.
“Beyond an already sizable initial resource, we have drilled only about 2.5 kilometres of an 11-kilometre corridor, on just one of our three contiguous tenements.”
The Malacacheta resource bolsters Brazil’s significant graphite developments and its emergence as a major source of critical minerals in South America, adding to its deposits of niobium, rare earths and lithium.
Continent’s top producer
Brazil hosts several producing graphite mines and is South America’s top producer of the mineral, which is increasingly important for its use in lithium-ion batteries and nuclear reactors. Last year, the country churned out 65,000 tonnes of graphite and was the world’s fourth largest producer, according to the U.S. Geological Survey.
Shares in Atlas gained 5% to $3.09 (C$4.39) apiece on Tuesday morning in Toronto, for a market capitalization of $15.1 million. The stock has traded in a 12-month range of $2.57 to $14.01.
Located in Minas Gerais state, Malacacheta is 580 km northeast of Rio de Janeiro.
Larger than Santa Cruz
In South America, one of Malacacheta’s closest peers is South Star Battery Metals’ (TSXV: STS; US-OTC: STSBF) producing Santa Cruz mine in Brazil, which hosts 14.9 million measured and indicated tonnes grading 2.29% Cg for 341,240 tonnes contained graphite. Its inferred resource totals 7.9 million tonnes at 2.32% Cg for 184,000 tonnes graphite. Santa Cruz is in Bahia state.
The Malacacheta resource is based on 2,394 metres of drilling across 21 holes, completed this year. The initial estimate provides a strong foundation for a planned preliminary economic assessment, Atlas said, without providing a timeline.
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