ASX-listed junior explorer Kibaran Resources expects to complete the feasibility and project evaluation study of its Epanko graphite deposit, part of the Mahenge graphite project, in south-east Tanzania, by mid-2015, says Kibaran Resources executive director Andrew Spinks, adding that, on completion of the study, the construction phase will start, with first production expected in 2016.

“Kibaran considers the potential for graphite production in Tanzania to be significantly positive, as graphite is a major global growth commodity with long-term global demand, in which there is a current market shortage,” he says, reiterating that the Epanko deposit has demonstrated that the graphite is an ultrahigh-purity, premium-quality large flake, with no limitations to its industrial use.

The deposit currently has a net present value of A$213-million, which indicates an economically robust graphite deposit, adds Spinks, further noting that the environmental- and social-impact assessments at Epanko remain on schedule.

In August, the company increased Epanko’s indicated and inferred resource to 22.7-million tonnes at a grading of 9.8% total graphitic carbon for 2.22-million tonnes of contained graphite.

Last month, the company appointed consulting engineering firm GR Engineering Services to undertake the feasibility and project evaluation study on behalf of Epanko, and to work on any subsequent graphite projects operated by Kibaran, which include the projects in Merelani-Arusha and Tanga, in Tanzania.

The feasibility study follows the recently updated scoping study that estimated the capital cost for Epanko, which has a mine life of 27 years, to be A$56-million for an operation that will produce 40 000 t/y of graphite concentrate. Further, operating costs were estimated at A$489/t.

While Kibaran secured its first binding take-or-pay graphite offtake agreement for Epanko in December last year, with an undisclosed European graphite trader, the company expects to sign a second offtake agreement for the Epanko deposit with a major European industrial group at the end of this year, says Spinks.

Although Kibaran faced several key challenges, including transporting equipment, products and people across the Kilombero river, as well as ensuring that there is power supply for the project site, the start of construction of the Kilombero bridge, as well as a well-advanced power line study for the area, has provided “a positive boost for the feasibility study, with a reduction in transport and energy costs”, says Spinks.

The company further notes that the infrastructure project will improve logistics and access to the project site and to the Port of Dar es Salaam.

Spinks tells Mining Weekly that Kibaran is also looking forward to finalising negotiations on a binding agreement to consolidate graphite assets at the Merelani-Arusha graphite project, which comprises seven tenements and covers 973.4 km2 in an area 55 km south-east of Arusha, in Tanzania.

Kibaran’s additional graphite assets include the Tanga graphite project, in the Tanga region of Tanzania. The company was granted a prospecting licence (PL) for graphite in the Tanga region by the Tanzanian Ministry of Energy and Minerals in March. The PL covers 84 km2 and is 120 km south-west of the Tanga port.

The company’s website says that the Tanga project offers significant early-stage exploration potential, with existing surrounding infrastructure. It also provides Kibaran with a third graphite province to underpin the company’s strategy of becoming a significant and long-term supplier of premium-quality graphite from Tanzania.

Nickel Asset Prospects
While Kibaran’s main focus is currently on bringing the Mahenge graphite project into production, with subsequent focus on the Merelani-Arusha graphite project, the company notes that it is considering divestment of its nickel assets in Tanzania.

“Kibaran is seeking a cornerstone investor to advance the company’s divestment strategy for its Kagera nickel project,” says Spinks.

Kagera covers 864 km2 along the western border of Tanzania, with its key tenements located within one of the recognised hot spot belts for nickel sulphide discoveries and along strike of the world’s largest undeveloped nickel sulphide deposit – the Kabanga nickel deposit. This deposit has an estimated resource of about 58-million tonnes at 2.6% nickel.

There are currently standout drill targets, advanced targets and significant data packages for the project, says Spinks, concluding that Kibaran considers the potential for further nickel sulphide discoveries to be promising.