Volt Resources has announced the completion of a feasibility study into the Stage 1 development of it’s flagship Bunyu graphite project located in Tanzania.
East Africa - The Stage 1 Feasibility Study is another important step forward in Volt Resources' plan to become one of the top three global producers of natural flake graphite.
“The company has been implementing a two stage development strategy following the completion of a large scale Pre-Feasibility PFS in December 2016," comments Volt Resources CEO, Trevor Matthews.
"Concurrent with the PFS completion, Volt Resources announced the largest graphite JORC Mineral Resource in Tanzania and one of the largest in the world.
“Following a detailed strategic review of product markets and financial markets, in May 2017 Volt Resources announced a clear pathway to transition the company into a globally significant producer of material quantities of high quality graphite products.
"It was decided that this accelerated pathway would be achieved via the development of the Bunyu project over two stages," he continues.
Stage 1 is focused on the development of a nominal 20,000 to 25,000 tpa graphite mine and processing facility in Tanzania with planned exports of graphite products into the USA, China and other markets.
The proposed Stage 2 development is an expansion of Stage 1 production based on the market demand for Bunyu’s graphite products and leveraging the large scale graphite mineral resource and Bunyu’s close proximity to critical infrastructure.
The Stage 2 expansion is targeted to meet expected significant increases in demand for coarse flake graphite in the expandable graphite market and fine flake size products for battery anode material and other existing and evolving industrial uses for micro carbon products.”
Feasibility Study Highlights:
- Key objective of Stage 1 development is to establish infrastructure and market position in support of the development of the significantly larger Stage 2 expansion project
- Stage 1 based on a mining and processing plant annual throughput rate of 400 000 tons of ore to produce on average 23,700 tpa of graphite products positioning Volt as a meaningful participant in the global flake graphite market
- Stage 1 financial analysis delivers favourable NPV and IRR over a payback period of 4.4 years Pre-tax NPV (10%) of US$18.6 million or Pre-tax IRR 21.0%
- Total EBITDA of US$93.6 million over 7 year Stage 1 project period – average annual EBITDA of US$13.1 million
- Development schedule of 12 months to first ore production – project development approvals and Stage 1 funding initiatives are well advanced
- Stage 1 FS indicates average FOB operating cost of US$664 per tonne and start-up capital cost estimate of US$31.8 million
- Stage 1 development incorporates a significant amount of infrastructure, utilities and mine development work that benefits the Stage 2 expansion
- DFS for Stage 2 is planned to proceed concurrent with Stage 1 project development
- Volt currently completing the final binding offtake agreements for substantially all of Stage 1 annual production
During the Stage 1 Feasibility Study Volt Resources working with its Tanzanian subsidiary, Volt Graphite Tanzania Ltd (VGT), has also conducted the following activities:
- Completed and lodged the Environmental and Social Impact Study (ESIS). The ESIS has been reviewed by the NEMC and Technical Advisory Committee which has involved a site visit and technical review meetings and is now in the final stage prior to forwarding to the Minister for Environment for approval. It is important to note the environmental approval incorporates the area to be developed under Stage 1 and the Stage 2 expansion.
- Lodged two Mining Licence (“ML”) applications covering the 18km2 footprint for Stage 1 and the Stage 2 expansion. The recent appointment of the Mining Commission has resulted in a large number of licence applications being approved. Once the environmental approval is obtained, the Company expects the mining licences to be approved soon thereafter.
- Completed the Resettlement Action Plan and received all approvals for the compensation arrangements with approximately 1,100 people either farming and/or living within the mining licences area. This is an important milestone as without the compensation arrangements being approved, the Bunyu Project would not be able to proceed to development. As explained previously the footprint that the compensation area covers incorporates the Stage 1 and Stage 2 expansion project.
- Held meetings with Volt’s graphite offtake partners and now completing the final binding offtake agreements for substantially all of Stage 1 annual production. These offtake agreements are in addition to the existing binding offtake agreement with US based graphene company, Nano Graphene Incorporated.
- Progressed with the development funding of Stage 1 through the planned issue of US$40m of Tanzanian listed Notes. With the assistance of the company’s advisors Volt Resources has prepared and lodged a prospectus with the Tanzanian regulators, the Dar es Salaam Stock Exchange and the Capital Markets and Securities Authority for their review and approval.
The Stage 1 development incorporates a significant amount of infrastructure, utilities and mine development work that benefits the Stage 2 expansion including the site access road, plant laydown area, tailings storage facility, waste dumps, stockpile areas, open pit development and mining, accommodation village and water supply.