Name of the Project
Montepuez graphite project.

Location
Mozambique.

Client
Battery Minerals.

Project Description
A value engineering study (VES) has determined that restructuring the Montepuez graphite project will result in the development generating outstanding financial returns. 

The aim of the VES was to:
• significantly improve financial returns highlighted in the February 2017 definitive feasibility study (DFS) by optimising the processing plant through modularisation;
• refine the mine plan to produce a higher head-grade;
• adopt an owner, operator, mining and accommodation model to eliminate the use of contractors; and
• reduce the size of the initial tailings dam and water supply facility.

Concentrate recoveries were also increased through a series of successful metallurgical and processing testwork. 

Under the VES, the Montepuez process plant will initially process run-of-mine ore at an average of 500 000 t/y at 12% total graphitic carbon (TGC) to produce 45 000 t/y to 50 000 t/y of dry graphite concentrate, with an average grade of 96.7% TGC. 

Compared with the February DFS, the VES has also reduced expected life-of-mine from 30 years to ten years, with concentrate production decreasing from 100 000 t/y to between 45 000 t/y and 50 000 t/y.

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 $146-million and an internal rate of return of 36.2%. Payback has been reduced from 4.75 years in the DFS to two years in the VES.

Value
Total capital expenditure in the VES is estimated at $42.33-million, compared with $126-million in the February 2017 DFS.

Duration
Construction is expected to start in the second quarter of 2018, with steady-state production expected in the final quarter of 2019.

Latest Developments
Mustang Resources has amended the terms of a A$19.95-million investment facility from US investor Arena Investors.

The amendments will result in Mustang’s spliting the second tranche of the funding into two parts, reducing the amount of the second tranche from the original A$3.8-million to A$1.99-million, and deferring the balance of the original second tranche drawdown until either June or July.

The reduction in funds of the original second tranche will result in less potential equity dilution for existing shareholders, but will not adversely affect the funding of Mustang’s planned project activities in June and July.

Mustang MD Bernard Olivier has noted that Arena’s overall financial commitment has not changed.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Battery Minerals, tel +61 8 9322 7600, fax +61 8 9322 7602 or email info@batteryminerals.com.