Name and Location
Epanko graphite project, Tanzania.

Client
Kibaran Resources.

Project Description
A bankable feasibility study on the Epanko project has confirmed the viability of a conventional opencut mine and conventional flotation processing plant.

The project has maiden proven and probable reserves of 10.9-million tonnes at 8.6% total graphitic carbon (TGC).

Mining will be conducted on a five-day, day-shift-only basis, with total movement of 57 000 bcm a month using an 80 t excavator and 40 t articulated trucks.

Mining will be from the Eastern and Western deposits, located within 1 km of the run-of-mine (RoM) pad. The Western deposit consists of mining a strike length of 850 m along the top of the hill to a depth of 180 m, with the Eastern deposit in a small valley and mined to a depth of 120 m.

The mine schedule has been formulated to target RoM feed within the limit of 440 000 t/y mill throughput, with a maximum of 40 000 t of concentrate output. From the ore reserve, only material over an 8% TGC cutoff will be fed to the plant for the first 16 years, after which stockpiled lower-grade material will be reclaimed and processed. There is 6.5-million tonnes at 9.9% TGC of high-grade feed sourced from 68% proved and 32% probable ore reserve over this period.

The prestrip will be limited to total movement of 180 000 bcm over four months to establish the Eastern deposit, RoM pad, haulage roads, and diversion bunds and drains. The Eastern deposit will be the main source for high-grade plant feed, with the Western deposit starting as a feed source after six months of processing.

The processing plant will include a two-stage crushing circuit that will deliver product to a storage bin. Ore will be reclaimed from the storage bin and delivered to a single-stage rod mill operating in closed circuit with a screen. The undersize from the mill product screen will report to a flotation circuit for recovery of the graphite using a circuit comprising rougher, scavenger, primary cleaner and secondary cleaner flotation stages. Graphite concentrate will be filtered and dried. Dry graphite concentrate will be screened into various product sizes and bagged for shipping. Flotation tailings will be transported to the tailings thickener and then be pumped to the tailings storage facility.

While the Epanko production rate has been set at 40 000 t/y of concentrate, the process plant has a nameplate throughput capacity of 480 000 t/y and can thus produce additional product.

Kibaran has developed an expansion strategy that can cater for expected future increases in demand for premium-quality large-flake graphite. The Epanko deposit can easily support a production rate of 100 000 t/y of concentrate, with the expansion capital being funded from cash flow. The additional footprint required for the expansion has been catered for in the design layout.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $197.4-million and a pretax internal rate of return of 41.2%, with a payback of 2.7 years.

Value
Capital expenditure is estimated at $77.5-million.

Duration
First production from the project will start about 17 months after the completion of project financing.

Latest Developments
Kibaran is poised to finalise project financing for the development of its Epanko project after raising $2-million through a share placement at 15c apiece.

As an additional funding mechanism, the placees will receive one free attaching option for every two shares subscribed. The options are exercisable at 20c apiece and expire six months from the date of issue.

The proceeds will be used in part to complete the due diligence process on Epanko being undertaken by KfW IPEX-Bank, the development funding agency of the German government and independent engineering firm SRK.

KfW has provided indicative terms and conditions for Kibaran concerning $40-million in debt funding for Epanko. Finalisation of this debt facility is subject to a due diligence process, including a peer review of the project’s feasibility study.

Epanko has an estimated capital cost of $77.5-million, of which $40-million is expected to be funded by the KfW facility. This is based on initial production of 40 000 t/y of natural flake graphite concentrate, generating yearly earnings before interest, taxes, depreciation and amortisation of $33.6-million.

Meanwhile, resources financier Nedbank has also given Kibaran an expression of interest to provide a further $30-million debt facility. Completion of these two debt facilities will pave the way for Kibaran to secure complementary project equity finance.

Site works are scheduled to start within three months of securing debt and equity finance, with first production forecast to take place nine months from then.

Kibaran has signed a binding long-term offtake agreement with German integrated materials and technology company ThyssenKrupp for 20 000 t/y of graphite concentrate and recently announced a memorandum of understanding (MoU) with Sojitz Corporation, one of Japan’s largest trading conglomerates.

The MoU aims to use Epanko graphite in the high-growth lithium battery industry, in which high growth is expected because of electric vehicles and the energy storage markets.
 
Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kibaran Resources, tel +61 8 6380 1003 or email info@kibaranresources.com.