MRC share price up 13% on high grade results

The MRC share price jumped on recent drill results. The cresults reveal the world's richest deposits of rutile, zircon and others

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The Mineral Commodities Limited (ASX: MRC) share price leapt by 13.64% on Tuesday following the release of positive drill results at the company's Tormin Inland Strands Project. MRC is a global mining and development company predominantly focused on the mineral sands and battery minerals sectors but also with interests in other mining tenements.

The company's three key projects in its mineral sands and battery minerals sector include the Skaland Graphite Operation, the Munglinup Graphite Project and the Torman Mineral Sands Operation:

The Skaland operation is the largest crystalline graphite producer in Europe and the fourth largest producer globally outside of China. Accordingly, it accounts for around 2% of global, annual, natural-flake graphite production.
The Munglinup project lies along the border of the shires of Esperance and Ravensthorpe in Western Australia. The most recent estimation of total mineral resource at the site was 7.99 million tonnes.
Tormin Mineral Sands, the project at the centre of today's announcement, is ∼360kms north of Cape Town on the west coast of South Africa. The site hosts some of the richest grades of naturally occurring zircon, ilmenite, rutile, magnetite and garnet in the world.

What moved the MRC share price?

The company announced very high grade results from its newly granted S102 Mining Right. This includes total heavy mineral (THM) grades from three separate drill holes on the Western Strandline (shoreline) as defined below.

  • 73.1% at 5 metres
  • 68.6% at 5 metres and
  • 65.2% at 7 metres

The strandline is a concentration of high-grade Valuable Heavy Minerals including zircon, rutile, anatase, ilmenite, garnet, and magnetite. Therefore, the Western Strandline deposit is now clearly defined to the point where the company will commence immediate mining.

Management commentary

MRC Executive Chairman, Mark Caruso said:

"The Company is now underpinning the known potential of one of the highest grade global mineral sands prospects … We will be stepping up our efforts to target additional resources that will further underpin the growth…at the Inland Strand at Tormin".

MRC share price

By the close of Tuesday's trade, the MRC share price was up by 13.64%. Accordingly, this values the company at $113.77 million with a price-to-earnings (P/E) ratio of 9.35. At the current price, the company has a trailing 12 month dividend yield of 5.2%.

Although MRC saw decreases in overall demand during the COVID-19 crisis, China's demand for high-grade, non-magnetic, zircon rutile concentrates continued unabated. I believe this holds the MRC share price in good stead moving forward. 

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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