Aim-listed investment group Armadale Capital reports that, in line with its recently completed definitive feasibility study (DFS), its wholly-owned south-east Tanzania-based Mahenge Liandu graphite project (Mahenge) is a large, long life, low cost graphite deposit with a focus on high-quality graphite concentrate for the rapidly emerging electric vehicle market.
Mahenge is located in a highly prospective region, with a high-grade Joint Ore Reserves Committee-compliant indicated and inferred mineral resource estimate of 59.5-million tons at 9.8% total graphitic carbon (TGC).
This includes 11.5-million tons at 10.5% measured, 32-million tons indicted at 9.6% and 15.9-million tons at 9.8% TGC, making it one of the largest high-grade resources in Tanzania, according to Armadale Capital.
Based on this resource, the DFS was initiated in October 2019 based on a two-stage project expansion strategy comprising a processing plant and infrastructure at a nominal design basis rate of 400 000 t/y to 500 000 t/y to produce a nominal 60 000 t/y graphite concentrate in the first four years of production. Stage 2 involves a second 0.5-million-tonne-a-year plant and associated additional infrastructure doubling throughput to one-million tonnes a year from the fifth year of operation.
Armadale chairperson Nick Johansen says the DFS for Mahenge has delivered “extremely compelling” economics.
“This study represents one of the most significant de-risking milestones in the company’s history to date . . . Across all commodities globally there are few mining projects that can demonstrate economics such as a 91% internal rate of return and a 1.6-year payback upon capital.”
He adds that the study shows that Armadale can be a significant low-cost supplier to the graphite industry with the potential to generate pretax cashflows of $882-million over an initial 17 year mine life with scope for further improvement.
“Agreements with a number of potential offtake partners have already been secured and with the delivery of the data from the DFS, the company is now in a strong position to move these agreements further forward in addition to advancing workstreams on potential debt finance packages and project level development funding for construction.”
A mine enhancement study was undertaken based on an appropriate balance of grade and strip ratio, rather than defining the largest economic pit. The result pointed to a starter pit to be mined for four years. This starter pit will use a 10% TGC cut-off to ensure the highest possible grade of ore feed in the early years of development.
Following the starter pit, a larger life-of-mine pit will be developed, using a reduced (6% TGC) cut-off grade for the remainder of the schedule to reduce waste and keep the stripping ratio as low as possible. The mining operation will be undertaken by a local mining contractor.
In terms of ore processing, the processing plant is designed to recover graphite concentrate by froth flotation. The design for the processing plant is based on a metallurgical flowsheet with unit operations that are conventional and well proven in the industry and aligned with current graphite industry practice, reports Armadale.
The run-of-mine ore will undergo two-stage crushing, followed by grinding in a rod mill, with graphite recovered by flotation. The process includes multi-stage re-grind milling and cleaner flotation to improve liberation and product purity.
The flotation concentrate is then dewatered by filtration and drying. The product is screened and bagged as final product in five different sized fractions and bagged for transport to port.
The tailings will be thickened and pumped to the tailings storage facility.
The second-stage expansion of the processing plant, which will take place in the fifth year of development, is expected to comprise a duplicate parallel production plant.
Electricity for the project will be supplied from diesel generators under a build-own-operate-maintain contract. Additional power for the second-stage expansion plant is expected to be supplied from an upgraded local grid network.
Graphite concentrate produced will be road-hauled to the Port of Dar Es Salaam for shipment to market.