Kibaran Resources has commencement the development of its Epanko graphite project in Tanzania, having entered into a non-binding letter of intent with GR Engineering Services.
Tanzania – The letter of intent signed between Kibaran Resources and GR Engineering Services provides a framework for the parties to negotiate an early works agreement and ultimately an EPC contract in relation to the design and construction of a new 460 000 tpa mineral processing facility at the 60 000 tpa Epanko graphite project.
Under the letter of intent, it is proposed that an early works agreement, where entered into, would provide for GR Engineering to undertake detailed engineering design works and early procurement activities.
Kibaran Resources may elect to pay for up to 30% of the early works via the issue of shares to GR Engineering. Where an EPC contract is progressed, the parties may also agree to assign the value of the early works into that contract.
Given the conservative capital cost estimation approach used during the Epanko bankable feasibility study and SRK independent engineer’s review, the parties plan to adopt a target cost estimate model for the EPC contract, incentivising GR Engineering for outperformance against agreed time and cost measures.
Entry into and commencement of the EPC contract is subject to finalising the Epanko debt financing programme, a final investment decision by Kibaran and receipt of all regulatory approvals.
“Kibaran Resources is focused on the remaining regulatory arrangements with the Government for the Epanko development so as to secure lender approvals in relation to the debt financing package. The company, with representation from its lenders, met with the Bank of Tanzania on 28 May 2018, who provided guidance to the company and we are working to finalise these remaining matters with the Government,” says Kibaran Resource chairman Robert Pett.
Pett also says that Kibaran is very pleased to partner with GR Engineering in the planned construction of this high quality, scalable and long-life graphite project with high value multiple downstream processing opportunities.