PERTH (miningweekly.com) – The share price of graphite developer Kibaran Resources soared by 33% on Friday after the company announced significant interest in debt funding for its Epanko project, in Tanzania.

Kibaran announced at the end of the week that it had received an expression of interest (EOI) from a development finance institution (DFI), which is a member of a large banking group and rated as one of the 50 safest banks in the world. The DFI is also considered to be one of the largest European DFIs, and has a strong record in the African mining sector.

Kibaran told shareholders that the DFI had expressed interest in providing a senior loan worth A$28-million, with a tenure of at least six-and-a-half years, including a one-year grace period on the principal repayment.

The DFI has also indicated its interest to act as arranger, on a best effort basis, for the balance of the project debt.

Executive director Andrew Spinks said on Friday that the debt financing EOI was a significant step forward for the company, which had now entered the development stage at the Epanko project.

“The EOI provides further confidence to graphite market participants that Epanko will commence production in the near term, and advance Kibaran’s ongoing discussions with a number of potential offtake customers.”

The EOI was subject to an evaluation of a due diligence on the project, including the feasibility study currently being undertaken, as well as the receipt of the environmental certificate.

It is currently estimated that the Epanko project could support output of as much as 100 000 t/y.

Kibaran recently initiated a review of its mining and processing schedule at Epanko, with a view to developing a growth strategy for the project beyond its initial 40 000 t/y production, which was currently the subject of a feasibility study.

The study confirmed that the eastern and western zones of the Epanko project could support a production rate of about 100 000 t/y of concentrate.

Kibaran traded at A$0.22 a share on Friday afternoon, after touching a high of A$0.235 earlier in the day.