Baobab Resources, the minerals explorer, says it has been encouraged by results from test drilling at its Tenge site in Mozambique.
The work so far "has defined broad packages of mineralisation" although the company is still waiting for the analysis results from 23 holes.
Ben James, Baobab's Managing Director, said: "The first round of drill results ... show a strong correlation with the grade characteristics of the Ruoni North and Ruoni South resource blocks. The Tenge resource, due out in March, is expected to push the global resource base well beyond Baobab's targeted 300Mt which will allow scope for ramping up production."
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Shares in the firm had fallen 1.25% by 11:49am, after opening up nearly 5%.
Over the last year the stock has dropped 20%.
BS
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