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
The company plans on starting production in 2021.

Latest Developments
Armadale Capital has signed a memorandum of understanding (MoU) for a proposed offtake agreement with Chinese company Datong Resources.

The proposed offtake is for 25 000 t/y of graphite concentrate produced from the Mahenge Liandu project.

The MoU is valid for an initial term of five years at a price based on the Chinese benchmark for the quality of the graphite produced.

Armadale has also signed MoUs with Matrass group for 30 000 t/y and with CooIRU for 5 000 t/y, adding up to 60 000 t/y under the MoU agreement.

This represents 122% of the company’s average targeted production of 49 000 t/y.

However, the current mine plan is based on only 25% of the total resource.

Armadale director Nick Johansen has said that the ability to secure offtake MoUs of this magnitude demonstrates the robust nature of Mahenge Liandu and completes an important step as the company proactively progresses the mine’s development.

Meanwhile, the company is working on a definitive feasibility study for the project.

Key Contracts and Suppliers
BatteryLimits (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.