Armadale Capital chairman William Frewen believes that the declaration of a maiden JORC resource estimate of this quantum and grade is a significant achievement as it underpins the potential commercial and strategic value of the emerging project.
“When factoring in a low strip ratio and high-grade coarse flakes, we are optimistic that significant shareholder value can be created by expediting development to tap into burgeoning demand for natural graphite,” says Frewen.
The Mahenge Liandu project is located in one of the world’s most prolific high-grade coarse flake graphite regions, surrounded by advanced projects such as Blackrock Mining’s Mahenge project and Kibaran Resources’ Epanko project.
“Our expectations remain high for future exploration and development activities at Mahenge Liandu as we remain focused on maintaining our ambitious development schedule and progressing towards production as soon as possible, Frenwen notes.
The next key phases for de-risking the project will be the release of inaugural metallurgical test-work in the first quarter 2017 to determine the purity and flake size distribution of the graphite, as well as starting the pre-feasibility study.
In addition, it is expected that a diamond drilling programme will be undertaken during the first half of 2017 to test extensions to the current resource and to upgrade the resource classification.
With the graphite concentrate from Mahenge Liandu expected to be attractive to prospective customers, the next step is to obtain independent verification that it can be used to produce spherical and expandable graphite. Consequently, management has sent bulk samples to an independent European laboratory to run tests, which should be released during the first quarter of 2017.
Assuming results of these tests are positive, Armadale Capital will be in a strong position to actively target prospective customers.
The company notes that capacity expansion by lithium-ion battery producers in China appears to be increasing due to accelerating demand from electric vehicles and power storage equipment.
Some of the giga-factories currently being built will start coming on line in 2017, which should provide tangible evidence of the growing demand for upstream inputs (including natural graphite) to make lithium-ion batteries.