Name of the Project
Mahenge graphite project.

Location
South-east Tanzania.

Client
Black Rock Mining.

Project Description
The Mahenge deposit is the fourth-biggest Joint Ore Reserves Committee-compliant contained graphite resource in the world. The project has a mineral resources estimate of 212-million tonnes grading 7.8% total graphitic carbon (TGC) for more than 16-million tonnes of contained graphite. Mahenge will be an openpit mining operation based on mining the Ulanzi and Cascade deposits using a conventional truck-and-shovel method.

Ore will be processed using a three-stage approach, which will initially process one-million tonnes a year in Stage 1, increase to two-million tonnes a year in Stage 2 and finally process three-million tonnes a year after the completion of Stage 3.

The three stages will be developed over the initial years of the mine, with current resource tonnes indicating a life-of-mine (LoM) of 32 years, after which the current defined deposits will be depleted. Total LoM concentrate production is estimated at 6.6-million tonnes.

Mining will be undertaken using conventional opencut techniques. Processing will be undertaken using well-proven crushing, grinding and flotation methods, comprising:

Stage 1, which will include a processing plant and infrastructure at a nominal design basis rate of one-million tonnes a year to produce up to 83 000 t/y of graphite concentrate in the first two years of production. The plant will be based at the Ulanzi pit.

Stage 2, which will include a second one-million-tonne-a-year plant and associated additional infrastructure, doubling throughput to two-million tonnes a year, and graphite concentrate production to 167 000 t/y from Year 3 of operation. Stage 2 includes some shared equipment with Stage 1. The plant will be based at the Ulanzi pit.

Stage 3, which will include a third one-million-tonne-a-year plant and associated additional infrastructure, increasing throughput to three-million tonnes a year, and graphite concentrate production of up to 250 000 t/y from Year 3 of operation.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a post-tax unlevered net present value, at a 10% discount rate, of $895-million and an internal rate of return of 42.8%.

Value
Capital expenditure for Stage 1 is estimated at $115-million, with a 10% contingency.

Stage 2 is expected to cost about $69.5-million and Stage 3 $84.2-million.

Duration
First production is targeted in 2020.

Latest Developments
Black Rock Mining has signed its third offtake agreement for its Mahenge graphite project.

Under the agreement with trading house Taihe Soar Supply Chain Management, Black Rock will supply up to 100 000 t/y of graphite concentrate over a three-year period.

Black Rock is expected to supply Taihe Soar with 37 500 t in the first year of operations, increasing to 80 000 t in the second year, and to 100 000 t in the third year of operations.

Combined with the existing offtake agreements with Heilongjiang Bohao and Qingdao Fujin, the offtake agreement with Taihe Soar represents about 85% of the proposed steady-state production of 240 000 t/y from Mahenge.

Black Rock CEO John de Vries has said that Taihe Soar’s capacity to deploy more than $200-million on trading assets, and turn over more than $400-million a year, positions Black Rock with a strong financial partner with the necessary skills to manage smaller entities not normally available to African developers.

As a result of the three offtake agreements, Black Rock has started work to optimise its mine plan by compressing the development schedule and working on a fourth self-funding module to take proposed production from the current planned rate of 250 000 t/y to more than 300 000 t/y over the planned 32-year mine life.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Black Rock Mining, tel +61 8 9320 7550 or email info@blackrockmining.com.au.