The high-grade indicated resource now stands at 10.3 million tonnes at 10.5% total graphitic carbon for 1.1Mt of contained graphite.

The overall high-grade resource is up 19% to 20.1Mt at 9.9% TGC for 2Mt of contained graphite.

The upgrade was the result of a 2083m infill diamond drilling program.

The resource starts at surface and is continuous to a vertical depth of about 150m.

The latest estimate will underpin a strong conversion to reserves as part of the current definitive feasibility study.

Graphex managing director Phil Hoskins said he was confident reserves would increase and extend mine life.

"Further to this, we are confident Chilalo has the potential for further extensions to mine life given the substantial strike length of untested, high-quality electromagnetic targets on our tenements," he said.

"The next six months for Graphex will be transformational as we work towards the completion of our DFS and unlocking our US$80 million funding package.

"The company is excited to enter the next phase of its journey as it strives to be the producer of choice for coarse flake graphite to the evolving expandable graphite market."

US private equity firm Castlelake agreed to provide up to $80 million in funding for the project, with completion of the DFS being a key condition.

A prefeasibility study released in September 2018 returned stage one capital costs of $43.6 million for production of 58,000 tonnes per annum of graphite for two years, and $32.5 million for stage two production of 108,000tpa for 4.3 years.

The PFS returned a post-tax net present value (10% discount rate) of $349 million, internal rate of return of 131% and payback period of nine months.

Shares in Graphex rose 7.7% to A21c, valuing the company at just over $20 million.