TanzaniaKibaran Resources’ 100%-owned flagship Epanko graphite project, located within the Mahenge graphite province, in Tanzania, is currently undergoing a bankable feasibility study has a total indicated and inferred mineral resource estimate of 22.7Mt, grading 9.8% TGC, for 2.2Mt of contained graphite, defined in accordance with the JORC Code. This initial estimate only covers 20% of the project area.

Metallurgy has found Epanko graphite to be large flake, expandable, ultra-high purity and premium quality from a global perspective.

Graphite is a modern industrial metal, now widely regarded as a major global growth commodity for the 21st century
Graphite is a modern industrial metal, now widely regarded as a major global growth commodity for the 21st century

Key highlights:

  • Epanko Project NPV significantly increased by 55% to US$396 million based on recently received indicative debt funding terms.
  • Bankable Feasibility Study remains on schedule and within budget.
  • Flotation testwork confirms Epanko flake size distribution consistent for very high grade (+20% TGC) graphite.

Financial modelling

The company has received further independent confirmation on the financial viability of its Epanko graphite project. Following the recent announcement that the company had received an expression of interest from a major European bank on the debt funding of the Epanko Project, Kibaran received correspondence from The CloudMiner.

CloudMiner has advised that it has prepared a working paper on Kibaran and updated its preliminary analysis of the Epanko graphite deposit.

The results of the paper provide a net production cost calculated pre-tax NPV of $396 million based on the proposed initial 40 000 tpa production at Epanko.

Kibaran believes meeting current demand by commencing at a production rate of 40,000tpa is prudent and independent feedback from graphite traders and financial institutions support this strategy. The economic viability of the Project at this level of production is clear and even more attractive on a scaled up growth strategy should the Company need to respond quickly to future increases in demand.

Bankable feasibility study (BFS)

The BFS being managed by GR Engineering Services (GRES) is progressing well and is on schedule and within budget. The following are the key advances and progress.

  • The location of the plant site, ROM pad, tailings storage facility (TSF) and site access have been finalised;
  • Geotechnical laboratory testwork and foundation assessment is complete and TSF and mine waste facilities engineering has commenced;
  • The metallurgical testwork program is well advanced with comminution testwork and sample characterisation complete;
  • Flotation testwork is well advanced with bulk flotation testing now underway;
  • Flow sheet development for the process plant is nearing completion;
  • Process design criteria development is continuing and process plant design has commenced;
  • Mine and process plant infrastructure engineering has commenced;
  • HV Power supply options study underway. The BFS is due to be completed by the end of June 2015

Flake size distribution confirmed for high grade

A flotation test with a head grade of 20.3 % TGC returned 63% of flake greater than 180 micron, which is consistent with the large flake size results achieved in previous testwork, and, in fact, better than, previously reported distributions for lower head grade Epanko graphite samples.

The commercial implications are significant as the BFS optimisation will be able to evaluate and schedule the higher grade in the mineral resource model.

This result provides further support that grade and flake size distribution are unrelated, and the high metamorphic gradient (heat and pressure) is a key factor to its graphite crystallinity and large flake size distribution. The test work results are based on testwork carried out on the 7 diamond holes drilled to date and the above sample was sourced from MHDD007.

The head grade achieved from the diamond core is much higher grade than indicated by the RC drilling (~12% TGC).