PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Chilalo graphite project, in Tanzania, has placed a price tag of $74-million on the project’s development, owner IMX Resources reported on Monday.

Based on average yearly production of 69 000 t of graphite concentrate, the Chilalo project was expected to return earnings before interest, taxes, depreciation and amortisation of $47-million a year over a ten-year mine life.

The PFS further estimated that the project would have a net present value of $200-million and a pre-tax internal rate of return of 62%.

“Completion of the PFS is an important milestone for IMX and the Chilalo graphite project, with the strong outcomes giving us a great deal of confidence that Chilalo will be a highly competitive, low-cost, high-margin openpit operation, incorporating conventional processing,” said IMX MD Phil Hoskins.

The PFS estimated an average life-of-mine operating cost of $490/t free-on-board, while metallurgical testing confirmed high-quality product, which could deliver a basket price of about $1 217/t for the base case production scenario.

“The study strongly endorses our commitment to continuing to progress the project towards production and will support due diligence work currently being carried out by several parties interested in project offtake and financing,” Hoskins added.

He noted that IMX’s immediate priority was to conclude discussions with potential offtake partners and to secure binding agreements.

“We will also look to finalise the environmental certificate and a mining licence, which will clear the way for the development of Chilalo.”

Meanwhile, IMX had also identified an opportunity to significantly improve project economics through further metallurgical testwork, not only on optimisation of work already completed, but also on low-grade and oxide ore which was expected to confirm the amenability of such material to commercial processing, and which could improve recoveries and product specifications. The completion of this testwork would allow for design enhancements and definitive feasibility study engineering work.