Tanzania – CPC Project Design is a leading mid-tier Perth based engineering company with extensive graphite and Africa experience, and will act as the engineering contractor for the definitive feasibility study (DFS) at the Mahenge project.
The scope of the study is for the first module of Ulanzi, Mahenge and the associated infrastructure.
The engineering study will commence in early January 2018 and is scheduled for completion in the second half of 2018.
Full completion and delivery of the study is subject to and conditional upon Tanzania putting in place its new mining code and regulations.
“We are commencing work on delivering the DFS, having recommenced drilling, and now commencing the engineering component of the study. Securing the services of CPC Project Design is important, as they bring highly valued experience given their involvement in Syrah Resources’ Balama graphite project, a wealth of recent graphite and African experience, coupled to the can-do approach of a mid-tier firm,” says Black Rock Mining executive director and CEO John de Vries.
“We are increasingly confident that we will see legislative clarification from the Tanzanian government in the not too distant future, and are positioning the company to progress the Mahenge project to deliver a DFS in the second half of 2018.
“With our Mahenge graphite project having costs within the lowest quartile costs and importantly a premium high-grade product, we think we have the best undeveloped graphite project in the world, and remain committed to developing it,” De Vries notes.
Mahenge project at a glance
Black Rock Mining announced a JORC-compliant mineral resource estimate of 211.9 Mt grading at 7.8% TGC for 16.6 Mt of contained graphite, making this one of the largest JORC-compliant flake graphite mineral resource estimates globally.
Over 50% of the mineral resource is in the measured and indicated categories.
In April 2017, Black Rock announced results of a preliminary feasibility study (PFS) and followed this up with an optimised PFS on 8 August 2017, which confirmed Mahenge’s potential as a long-life, low capex, high margin operation.
The optimised PFS estimated a post-tax, unlevered, internal rate of return (IRR) for the project of 45.1%; and a net present value (NPV) using a discount rate of 10% (NPV10) of US$905 million.
Black Rock confirms that it’s optimised PFS has allowed for the proposed Tanzanian legislative changes relating to 16% free carry position of the Tanzanian government and the royalty fee increasing to 4.3%.
Subject to clarification on Tanzanian legislative changes, Black Rock is moving towards commencing a DFS. With a successful DFS and associated financing, construction could commence in 2018 with first production in late 2019.