Aim-listed Armadale Capital continues to make excellent progress advancing its Mahenge Liandu graphite project in Tanzania.
Tanzania – With one of the largest high-grade resources in Tanzania, the wholly owned graphite project has a JORC compliant indicated and inferred mineral resource estimate of 51.1Mt at 9.3% TGC, including 38.7Mt Indicted at 9.3% and 12.4Mt at 9.1% TGC.
Work to date has demonstrated the project’s potential as a commercially viable deposit, with significant tonnage, high-grade coarse flake and near surface mineralisation (implying a low strip ratio) contained within one contiguous ore body.
Currently, Armadale is completing a DFS based on the results of a Scoping Study that was completed in March 2018. In line with this, Armadale has commissioned Batterylimits in Perth, Australia, to expand the scope of the DFS to include downstream analysis on high-quality, high-purity flake graphite concentrate produced from Mahenge Liandu during the metallurgical test-work programme to verify it meets the stringent requirements of prospective Chinese off-take partners.
In turn, a leading graphite processing specialist will undertake a series of tests to determine which high value products can be produced from the finished graphite concentrate product.
Rapidly progressing towards commercialisation
The Scoping Study verified Mahenge Liandu could produce a coarse flake, high-purity graphite product underpinning a compelling business case to progress commercialisation plans. Based on a 400 000tpa throughput, it highlighted the following key positive metrics:
- Producing an average of 49 000tpa of high-quality graphite products for a 32-year mine life;
- The near surface nature of the deposit produced a low 1:1 strip ratio for the life of the mine;
- The project has a low operating cost of US$408/t, based on an average 12.5% TGC life of mine grade;
- The project has a pre-tax IRR of 122% and NPV of $349m, with a low development capex of $35m; and
- The maximum draw-down during the construction is $34.9m and the after-tax payback period is 1.2 years.
There remains significant scope to further improve returns, with staged expansions as the current mine plan is based on circa 25% of the total resource.
Nick Johansen, director of Armadale said: “Our priority in the lead up to the DFS being released towards the end of 2019 is to demonstrate that our commercialisation strategy is gaining momentum.
“To this end, we are delighted to commence downstream analysis of graphite concentrate, which will generate key data for our prospective Chinese off-take partners. We are optimistic that Mahenge Liandu will deliver similar results to further enhance its already robust economics.”