PERTH (miningweekly.com) – A feasibility study into the Stage 1 Bunyu graphite project, in Tanzania, has delivered a pre-tax net present value of $18.6-million and an internal rate of return of 21%.
ASX-listed Volt Resources on Tuesday said that the Stage 1 operation is based on a mining and processing plant with a throughput rate of 400 000 t/y of ore, to produce an average 23 700 t/y of graphite products, positioning Volt as a meaningful participant in the flake graphite market.
The Stage 1 development will establish infrastructure and market position, to support the development of a significantly larger Stage 2 expansion project.
The feasibility study found that Stage 1 will cost $31.8-milliion to develop, and will deliver total earnings before interest, taxes, depreciation and amortisation of $93.6-million over a project life of just over seven years, and a total net revenue of $268.6-million in the same period.
The project will require a 12-month development period to first ore production, with project development approvals and Stage 1 funding initiatives all well advanced, Volt said on Tuesday.
“The company has been implementing a two stage development strategy following the completion of a large-scale prefeasibility study in December 2016. Concurrent with the prefeasibility study completion, Volt announced the largest graphite Joint Ore Reserves Committee mineral resource in Tanzania and one of the largest in the world,” said Volt CEO Trevor Matthews.
“Following a detailed strategic review of product markets and financial markets, in May 2017 Volt announced a clear pathway to transition the company into a globally significant producer of material quantities of high quality graphite products.
“It was decided that this accelerated pathway would be achieved via the development of the Bunyu project over two stages.”
Matthews said that the Stage 2 expansion would be targeted to meet the expected significant increase in demand for coarse flake graphite in the expandable graphite market, and fine flake size products for battery anode material and other existing and evolving industrial uses for micro carbon products.
A definitive feasibility study for Stage 2 will proceed concurrent with the Stage 1 project development.
Volt is now completing the environmental approval for the Bunyu project, and has lodged two mining licence applications covering the footprint for the Stage 1 project and the Stage 2 expansion.
Concurrently, the company is working with Exotix Capital and other advisers seeking approval for, and to issue a prospectus to raise the development capital for, the Stage 1 development.
The company is also completing offtake agreements with Chinese partners for the Stage 1 flake graphite production.