Mustang Resources Ltd: Caula Graphite Project Concept Study Drilling Complete

Sydney - Mustang Resources Ltd. (ASX:MUS) (OTCMKTS:GGPLF) is pleased to announce it has completed the diamond drilling campaign which will underpin the concept study on its 80%-owned Caula Graphite Project in Mozambique.

Key Points

- 11 further diamond drill holes completed as part of the current Concept Study on the Caula Graphite Project in Mozambique

- Concept Study infill and resource extension drilling campaign also aimed at further upgrading current JORC resource of 5.4Mt at 13% Total Graphitic Carbon (TGC) for 702,600 tonnes of contained graphite

- Wide graphite intersections in all 11 diamond holes drilled including:

o 86m from 57m to 143m downhole in MODD 014

o 68m from 44m to 112m downhole in MODD 018

o 62m from 6m to 68m downhole in MODD 019

o 59m from 5m to 64m downhole in MODD 032

o 55m from 35m to 90m downhole in MODD 031

- Previous diamond drilling at Caula returned spectacular grades up to 26% TGC with wide zones averaging more than 15% TGC

- Samples are being sent for assaying and metallurgical testwork

- Concept Study scheduled for completion in Q2 2018 followed by commencement of Definitive Feasibility Study (DFS).

The concept study is on track for completion in Q2 this year, which will in turn pave the way for Mustang to commence the Definitive Feasibility Study.

This latest infill and extension drilling, comprising 11 holes for 1421m, is aimed at increasing and upgrading the existing Inferred JORC Compliant Mineral Resource, which stands at 5.4Mt (at a 6% cut-off grade) at 13% TGC for 702,600 tonnes of contained graphite, including exceptionally high-grade components of up to 26% TGC.

Mustang Resources Managing Director Bernard Olivier said the latest drilling program had further enhanced the Company's confidence in the project and the continuity of the defined graphite mineralisation.

"The drilling continues to demonstrate that Caula is emerging as a world-class graphite deposit," Dr Olivier said.

"In light of what we have observed, we are eagerly awaiting the assay and metallurgical testwork results, which will all form part of the project's Concept Study.

"Pending the results of the Concept Study, Mustang is committed to fast-tracking the development of Caula by commencing the DFS phase of resource drilling in Q2 2018."

Caula Infill Diamond Drilling, December 2017

The December 2017 diamond drilling campaign was designed as resource infill and extension drilling and forms part of the Concept Study being developed for the Caula Project. Eleven holes as were completed mid-December 2017 by Major Drilling Group International totalling 1,421.5m (MODD14 to MODD22 and MODD030 to MODD032) with detailed geological logging undertaken by Mustang's geologists and Competent Person. Cutting and sampling of 10 of the 11 cored boreholes was completed in December, with the remaining hole completed in mid-January.

This drilling was designed to provide representative samples for further detailed metallurgical testwork and with the goal of increasing the initial Inferred JORC Compliant Resource's size and confidence levels. Thereafter, Mustang intends to commission feasibility studies for detailed planning of the next phases of development.

Major Graphite Intervals

Major graphite intervals (visually logged, subject to assay confirmations, see Appendix 1 in link below) include 86 metres of graphite mineralisation from 57 metres to 143 metres depth (MODD 014), 68 metres of graphite mineralisation from 43 metres to 112 metres depth (MODD 018) and 62 metres of graphite mineralisation from 6 metres to 68 metres depth in MODD 019. Oxidised graphite mineralisation is found within 16 metres from surface transitioning to a fresh graphite zone (typically) at 53m vertical depth and extending beyond the end of hole depths.

Project Area Potential

The Caula Project is located within a world-class graphite province and as previously indicated there is significant potential to expand the maiden Mineral Resource estimate through ongoing exploration and drilling.

The results of the completed diamond drilling campaign are expected to expand the current JORC resource and provided insight into the down-dip and eastern extensions of the Caula deposit and further enhance confidence in the continuity of the defined mineralisation.

Broad zones of mineralisation were identified during the original sampling program. The lithological logging has indicated an extension of mineralisation eastwards.

The Caula discovery is located at the northern end of a suite of large-scale geophysical (TEM) anomalies that extend over an 18km strike length within Mustang's tenements (see Figure 5 in link below). Drilling at the Caula site confirms a strong spatial correlation between the TEM anomaly and high grade graphite mineralisation in drillhole intersections. The larger-scale TEM anomaly has received minimal drilling to date and therefore remains largely untested.

The planned 2018 DFS drilling program for the Caula Deposit will consist of both DD and RC holes targeting Inferred, Indicated and Measured Resources. Drilling of the strongest anomalies south of Caula will also be carried out to confirm the continuation of the graphite mineralisation.

Mustang proposes to systematically drill-test the large-scale TEM target through progressive step-out drilling from the Caula discovery.

Geology of the Caula Graphite Deposit

The Caula deposit, is located in northern Mozambique, approximately 230km west of the coastal capital city of Pemba and is situated within Prospecting & Exploration Licence 6678L. Topographically, the Caula site is very flat with a slight gradient downslope to the north-east. There are no drainage lines for a radius of at least 2km around the project centre.

The project area is situated in the Mozambique Belt of the East African Orogen and contains highly metamorphosed meta-sediments and meta-volcanics.

Graphite mineralisation at Caula is hosted in quartzitic schists of the Xixano Complex. The most common lithologies include graphitic schists, gneisses and thin pegmatoidal zones. Sulphides are occasionally observed but are usually absent.

The mineralised zone is contained within a reclined isoclinal fold structure which dips at roughly 60 degrees to the west. Due to the region's tectonic history these meta-sediments have been altered to the extent that no sedimentary structure remains.

Mustang Resources has been actively exploring for graphite on the licence area since 2014. Initial field work and satellite imagery were used to identify potential areas of mineralisation aligned with potential strike extensions to graphite mineralisation at the Triton Minerals Nicanda Hills Project to the south.

To view the figures, please visit:
http://abnnewswire.net/lnk/4864XV78

About Mustang Resources Ltd:

Listed on the Australian Securities Exchange, Mustang Resources Ltd. (ASX:MUS) (FRA:GGY) is an emerging gemstone developer and producer focused on the near-term development of the highly prospective Montepuez Ruby Project in northern Mozambique.

The Montepuez Ruby Project consists of three licences and now one mining concession covering 19,300 hectares directly adjacent to the world’s largest ruby deposit discovered by Gemfields Plc in 2012. Since supply of rubies from sources outside Mozambique has become fractured and unreliable, Mustang stands to capitalise on the current high demand around the world for ethically produced rubies by becoming a reliable, consistent supplier of high-quality rubies.

The Company is currently fast-tracking its work program on the Montepuez Ruby Project with extensive secondary deposits discovered and low-cost bulk sampling well underway. First rough ruby sales are scheduled for 27 to 30 October 2017 in Port Louis, Republic of Mauritius under a closed bid tender of more than 350,000 cts gem quality rubies.

Visit the Mustang website at http://www.mustangresources.com.au for more information.



Contact:

Mustang Resources Ltd.
Media & Investor Relations: Paul Armstrong
E: paul@readcorporate.com.au
T: +61-8-9388-1474