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Alliance Resources reckons it could have its foot on one of the biggest graphite deposits in Australia.

The Melboune-based gold explorer released new results today from a drilling program at its “Yeltana” prospect in South Australia.

Alliance (ASX:AGS) now estimates it has a target of 24.5 million to 59 million tonnes of graphite grading between 5.5 per cent and 10.2 per cent.

The exploration targets are conceptual in nature, however, because not enough exploration has been conducted to estimate a mineral resource.

Discovered in mid-2017, Yeltana is part of the Wilcherry project — a joint venture between Alliance (75%) and Tyranna Resources (25%).

Alliance share – which have traded between 8.3c and 18c over the past year — enjoyed a nice 14 per cent bump on the news to 12.5c. The share price of Tyranna Resources (ASX:TYX) increased slightly to 15c.

The Alliance Resources (ASX:AGS) share price over the past year.
The Alliance Resources (ASX:AGS) share price over the past year.

Graphite industry experts will now be engaged to help assess the commercial viability and opportunities to develop Yeltana, the company said.

This will initially consist of preliminary metallurgical test work and then –if warranted — a systematic exploration drilling and metallurgical testing program to define a mineral resource.

Graphite has experienced increased demand due to developments in battery technologies for the emerging electric vehicle industry.

Assessment of Yeltana will occur in parallel with the development of the Alliance’s Weednanna gold deposit, which is just 20km to the east.