Name of the Project
Caula graphite and vanadium project.

Location
Northern Mozambique.

Client
New Energy Minerals, formerly Mustang Resources.

Project Description
Caula contains an exceptional combination of high-grade (13%) total graphitic carbon and could deliver high percentages of super jumbo, jumbo and large flakes.

The project has established a Joint Ore Reserves Committee-compliant resource of 22-million tonnes at 0.37% vanadium and 13.4% graphite for 81 600 t of vanadium and 2.93-million tonnes of graphite respectively.

A strategic review has found that the most effective way of developing Caula involves a two-stage development strategy.

Phase 1 comprises a robust, low-cost mining operation producing about 100 000 t/y of ore for 10 000 t/y to 15 000 t/y of high-grade (97% carbon) graphite concentrate.

From the start of operations, vanadium will be extracted to a concentrate. This will be sold to a vanadium producer or stockpiled for future production of refined vanadium pentoxide (V₂O₅) chemicals. The Phase 1 graphite plant is being designed to allow for the future incorporation of all processing equipment into the larger Phase 2 graphite plant.

The sale of graphite and vanadium products produced in Phase 1 will be used to secure binding offtake agreements and associated finance required for Phase 2 development.

Phase 2 entails the expansion of mining operations to between 300 000 t/y and 600 000 t/y of ore. A large full-scale processing plant capable of delivering from 50 000 t/y to 75 000 t/y of high-grade (97% carbon) graphite concentrate will be built.

A full-scale vanadium concentrate processing plant, capable of producing refined vanadium products (99.9% purity V₂O₅ and other vanadium chemicals such as vanadium sulphate) for the fast-growing aerospace alloy and battery markets, will also be built.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
Preproduction capital expenditure for Phase 1 is estimated at $7.37-million and for Phase 2 at $114.21-million.

Duration
Phase 1 of the project development is expected to be completed and produce sellable products in the first half of 2019.

Latest Developments
New Energy Minerals has announced a series of investments that will assist with the development of the Caula vanadium/graphite project.

The company has entered into a binding agreement with a Hong-Kong based investor group, the first of which is a share placement worth A$1.5-million.

In addition to the share placement, the investors will also invest A$3.5-million at asset level, through a subscription of 50% of the shares of New Energy subsidiary Balama Resources, which currently holds an 80% interest in the Caula project.

The asset-level investment is subject to a legal and technical due diligence, as well as regulatory approvals.

The proceeds from the placement and the strategic investment will be used for assays, metallurgical testing, prefeasibility studies and preparation work for the Caula Phase 1 production, as well as for general working capital.

Key Contracts and Suppliers
TOMRA Sorting (preliminary ore sorting testwork).

On Budget and on Time?
Not stated.

Contact Details for Project Information
New Energy Minerals, tel +61 8 9217 2400.