Name of the Project
Mahenge Liandu graphite project.

Location
Tanzania.

Project Owner/s
Armadale Capital.

Project Description
The Mahenge Liandu deposit is one of the highest-grade, large-flake deposits globally after the recent upgrade to 51.1-million tonnes at 9.3% total graphitic carbon (TGC), including 38.7-million tonnes in the indicated category at 9.3% TGC and 12.4-million tonnes in the inferred category at 9.1% TGC.

The scoping study completed on the project is based on a throughput of 400 000 t/y, producing an average of 49 000 t/y of high-quality graphite products during a 32-year life-of-mine.

The deposit has a low average strip ratio of 1:1 for the life of the mine and a very low operating cost of $408/t. There remains significant scope to further improve returns using staged expansions, as the current mine plan is based on about 25% of the total resource.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $348.7-million and an internal rate of return of 122%, with a payback of 1.2 years.

Capital Expenditure
The project has a low development capital expenditure of $34.9-million.

Planned Start /End Date
The company plans on starting production in 2021.

Latest Developments
Armadale Capital has confirmed that commercialisation plans for the Mahenge Liandu graphite project continue to advance, with initial metallurgical testwork in line with expectations.

Armadale has noted that ore has been crushed up to 1 mm then put through an initial rougher flotation circuit, which has achieved up to 95% initial recovery levels.

Further, incremental testwork to enhance the quality of the final graphite concentrate product is progressing well, with targeted premium purity levels expected in the 95% to 97% range, which are at the higher end of graphite projects globally.

Other developments which have positive connotations for Mahenge Liandu’s economics include rainfall data indicating that ample surface water will be available to build and operate the mine and processing plant, materially reducing the use of “costly” groundwater.

The mine plan will incorporate the use of surface and recycled water to minimise the drawdown of groundwater resources, as well as reduce runoff from site into surrounding communities.

Armadale’s local management met with the Liandu village council committee, the district commissioner and the district executive director in June to review engagements to date and focus on areas where cooperation could be enhanced.
 
Meanwhile, Armadale is incorporating the latest topographic survey data and most recent round of reverse circulation and diamond drilling into an updated resource model. The results of the update will be used in the mine planning phase of the definitive feasibility study, which is on track to be completed by November.

The company is progressing through the final part of the metallurgical testwork programme, which is being conducted at global testing, inspection and certification company Bureau Veritas’ facility in Perth, Australia. Testwork is focused on maximising the quality of the graphite product, with an increased emphasis on enhancing purity levels.

Armadale reported “exceptionally” high-grade, near-surface assay results of the first four of an 18-hole reverse circulation drill programme in July.

The company expects to submit its mining licence application in August, and to start the front-end engineering design study in the fourth quarter of this year, after the completion of the DFS.

Key Contracts and Suppliers
Battery Limit (scoping study).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Armadale Capital, tel +44 20 7236 1177 or email info@armadalecapitalplc.com.