Aim-listed Armadale Capital made notable progress in advancing its Mahenge Liandu graphite project, in Tanzania, in 2018.
The company on Tuesday reported that it had completed a scoping study that highlighted a potential net present value of $349-million and an internal rate of return of 122%.
Armadale expects to complete a definitive feasibility study during the fourth quarter of this year, with production to start in 2021.
Armadale has signed its first memorandum of understanding toward an offtake agreement and discussions are under way with other potential customers.
“This indication of interest highlights the increased global demand for high-quality graphite products; notably Mahenge Liandu is one of the largest high-grade resources in Tanzania with a high-grade Joint Ore Reserves Committee-compliant indicated and inferred mineral resource estimate of 51.1-million tonnes at 9.3% total graphitic content,” said director Nick Johansen.
He noted in a statement that the global demand for graphite was likely to accelerate, driven by demand for spherical graphite from the energy sector, as well as emerging demand for expandable graphite used in products such as fireproof insulation.
Armadale continues to actively review investments with similar quality and potential to Mahenge.