Name of the Project
Mahenge Liandu graphite project.

Location
Tanzania.

Project Owner/s
Armadale Capital.

Project Description
The Mahenge Liandu deposit is one of the highest-grade, large-flake deposits globally after the recent upgrade to 51.1-million tonnes at 9.3% total graphitic carbon (TGC), including 38.7-million tonnes in the indicated category at 9.3% TGC and 12.4-million tonnes in the inferred category at 9.1% TGC.

The scoping study completed on the project is based on a throughput of 400 000 t/y, producing an average of 49 000 t/y of high-quality graphite products during a 32-year life-of-mine.

The deposit has a low average strip ratio of 1:1 for the life of the mine and a very low operating cost of $408/t. There remains significant scope to further improve returns using staged expansions, as the current mine plan is based on about 25% of the total resource.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $348.7-million and an internal rate of return of 122%, with a payback of 1.2 years.

Capital Expenditure
The project has a low development capital expenditure of $34.9-million.

Planned Start /End Date
Not stated.

Latest Developments
Armadale Capital has raised £795 275 through the placing of 72.30-million shares at a price of 1.1p apiece to support the completion of the definitive feasibility study (DFS) for the Mahenge Liandu project, and bring the company to the point at which it will decide whether to mine.

Armadale believes that the DFS, to be published later this year, will highlight and confirm the compelling economics established in the scoping study.

Meanwhile, Armadale Capital has signed a memorandum of understanding (MoU) for a proposed offtake agreement with Chinese graphite mining and processing company Matrass Group, for graphite products produced at the Mahenge Liandu project.

The MoU pertains to the proposed offtake of 30 000 t/y of graphite concentrate for an initial five-year term at a price to be agreed based on the Chinese benchmark for the quality of the graphite produced, and representing more than 60% of Mahenge Liandu’s average targeted yearly production.

A testwork programme, aimed at progressing the MoU to a binding agreement, is planned to start before the end of March. 

Armadale has entered into discussions with several potential customers regarding the remaining 19 000 t/y of production. These discussions are ongoing.

Meanwhile, the feasibility study drilling on the project has been completed, with further site activities expected to restart in the coming weeks once the Tanzanian wet season has ended.

Moreover, the environmental- and social-impact assessment has been completed, with the valuation study returning lower-than-planned relocation costs, which further enhanced the economics of the project.

Key Contracts and Suppliers
BatteryLimit (scoping study).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Armadale Capital, tel +44 20 7236 1177 or email info@armadalecapitalplc.com.