PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Mahenge graphite project, in Tanzania, has estimated that the project could produce some 167 000 t/y of high purity graphite over a mine life of 32 years.

ASX-listed Black Rock Mining said on Monday that the project would require a capital investment of $159-million. It would deliver a post tax net present value of $624-million and a post tax internal rate of return of 48.2%.

The project will be developed in two stages, with Stage 1 consisting of a processing plant and infrastructure with a design capacity of one-million tonnes a year, to produce some 83 000 t/y of graphite in concentrate over the first two years of production.

The Stage 2 development will see a second one-million-tonne-a-year plant and associated infrastructure, doubling throughput to two-million tonnes a year, and production to 167 000 t/y graphite concentrate from year three of operation.

The Stage 1 development is expected to require a capital expenditure of around $90.1-million.

“The PFS builds on a compelling scoping study and reconfirms the Mahenge graphite project’s potential to be a globally significant graphite producer, with industry leading low capital expenditure, and sustained high margins,” said Black Rock interim CEO and executive director John de Vries.

“The mine metrics are driven by low strip ratios and high-grade ore that can be relatively simply converted into large high purity, premium flake concentrate.”

De Vries said that the staged development model would allow the project to be large enough to be investable, but small enough not to disrupt the overall flake market, while generating sufficient cash to self-fund the second module.

“The self-funding, sequential model strategy is sized to accommodate the expanding market in high purity flake without being overly disruptive. It simplifies and de-risks our build by using modular assembly and flat-pack, off-site construction where possible.”

De Vries noted that with the favourable PFS outcomes, Black Rock was now completing negotiations construction partners, with the aim of starting construction in 2018 and first production in 2019.