Name of the Project
Molo graphite project.

Location
Madagascar.

Client
Energizer Resources.

Project Description
The front-end engineering design (FEED) study completed on the Molo project to examine ways of optimising the mine plans as envisioned in the feasibility study has suggested a phased approach to achieving commercial production at the project.

Phase 1 will comprise the construction of a demonstration processing plant, capable of producing flake graphite concentrate on a test basis.

The plant will use dry-stack tailings to eliminate the upfront capital costs associated with a tailings dam.

The demonstration plant is designed to be a ‘proof of concept’ operation with the goal of optimising the process circuit while allowing Energizer to supply true run-of-mine flake concentrate to customers for final product validation.

Base, essential-only infrastructure will be employed for this phase, with Energizer’s current camp being used for accommodation and offices, including accommodation for workers in Fotadrevo.

Phase 2 will include the development of sustaining infrastructure required for long-term processing and the ramp-up of production at the demonstration plant to its full capacity of 240 000 t/y of ore. This phase will likely include the construction of additional on-site accommodation and offices, the upgrading of mine-site road infrastructure, and purchases to provide redundancy in the processing circuit.

Energizer will also investigate the inclusion of value-added processing for lithium-ion battery and graphite foil applications at the classification portion of the plant. A costing review will be undertaken to identify the costs associated with incorporating these value-add enhancements.

Assuming Phase II operates at full capacity, it would produce 14 750 t of graphite at the estimated operating costs as outlined below.

Phase 3 will entail additional mine build-out infrastructure and plant construction for a fully operational, large-scale mine as envisioned in the Molo feasibility study.

This will include construction of a tailings dam facility and upgrading or maintenance of the regional road system used to transport graphite concentrate to the port.

The feasibility study envisages a mine that will produce an average of 856 701 t/y of ore, which will be processed to produce an average of about 53 017 t/y of graphite concentrate over a 26-year life-of-mine.

Jobs to Be Created
Not stated.

Net Present Value/Internal Rate of Return
The feasibility study on the project has an estimated post-tax net present value, at a 10% discount rate, of $389.80-million and an internal rate of return of 31.2%, with a 4.84-year payback.

Value
According to the Molo feasibility study, the project has an estimated capital cost of $149.90-million. The study assumes that the mine will be funded on a 50% debt and 50% equity basis.

The FEED has determined that the Phase I build-out will include detailed engineering, equipment procurement, off-site fabrication and assembly, factory assurance testing, module disassembly, shipping, plant infrastructure construction, and on-site module assembly at a cost of about $8.5-million.

The costs for items in Phase II are currently unknown, but Energizer will determine these costs in parallel with the development of Phase 1.

Duration
It is estimated that the Phase I processing plant will require about nine months to complete.

Latest Developments
Energizer has appointed former MD of Africa-based mining engineering and construction company DRA Africa Johann de Bruin to oversee all aspects regarding the operational readiness of the Molo project as the company prepares to start procurement for mine infrastructure.

Building on the positive results of the FEED study, Energizer decided to initiate the detailed engineering study.

According to the company, the detailed engineering study represents the final stage of project development and is performed before project construction starts, when the procurement of equipment to build a mine is imminent.

DRA prepared the company’s feasibility study on the Molo project in 2015, with De Bruin, at that time, the primary liaison between DRA and Energizer. De Bruin also served on Energizer’s board of directors from 2012 to 2014, when he stepped down to focus on his increasing responsibilities as DRA MD.

De Bruin will be tasked with reviewing and forming the Molo mine operating team, reviewing all mine-item cost structures to ensure that the project is optimally prepared for the implementation phase and assisting in the execution of the project.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Energizer Resources senior VP of corporate development Brent Nykoliation, tel +1 416 364 4911, fax +1 416 364 2753 or email info@energizerresources.com.