Name of the Project
Mahenge Liandu graphite project.

Location
South-east Tanzania.

Project Owner/s
Armadale Capital.

Project Description
Mahenge Liandu has a high-grade Joint Ore Reserves Committee-compliant indicated and inferred mineral resource estimate of 59.5-million tonnes at 9.8% total graphitic carbon (TGC).

A definitive feasibility study (DFS) has confirmed compelling economics for the project over a 17.5-year mine life.

The DFS envisages a staged ramp-up planned to facilitate near-term production.

Stage 1 will include a processing plant and infrastructure at a nominal design basis rate of 400 000 t/y to 500 000 t/y to produce a nominal 60 000 t/y graphite concentrate in the first four years of production.

The processing plant is designed to recover graphite concentrate by froth flotation. The design for the processing plant is based on a metallurgical flowsheet, with unit operations that are conventional, well proven in the industry and aligned with current graphite industry practice.

The run-of-mine ore will be crushed in two stages, followed by grinding in a rod mill, with graphite recovered by flotation. The process includes multistage regrind milling and cleaner flotation to improve liberation and product purity.

Stage 2 will include a duplicate 500 000 t/y parallel production plant and associated additional infrastructure, doubling throughput to one-million tonnes from Year 5 of operation.

The tailings will be thickened and pumped to the tailings storage facility.

The mining operation will be undertaken by a local mining contractor.

Power for the project will be supplied from diesel generators under a build, own, operate and maintain contract. Additional power for the second-stage expansion plant is expected to be supplied from the upgraded local grid network.

Graphite concentrate produced will be road-hauled to the Port of Dar Es Salaam for shipment to market.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated pre-tax net present value of $358.1-million and an internal rate of return of 91.2%, with scope for further positive improvement on economics in near-term through delivery of an optimised DFS.

Stage 1 has a payback of 1.6 years.

Capital Expenditure
The capital cost estimate for Stage 1 is $38.58-million, which includes a contingency of S4.1-million or 15% of total direct capital cost, a slight increase on the scoping study, allowing for the staged ramp-up.

Stage 2 will entail capital expenditure of $30.86-million, which includes contingency of $3.23-million.

Planned Start/End Date
First production is expected to be 10 to 12 months from the start of construction.

Latest Developments
Armadale Capital has submitted its mining licence application to the Tanzanian Department of Energy on Minerals for the Mahenge Liandu graphite project.

This marks another significant step in the development of the project, chairperson Nick Johansen has said.

The receipt of a mining licence for the project will be one of the final and most important derisking milestones for the company.

Meanwhile, the company is progressing discussions with several parties to secure a development partner for the construction phase of the project. 

Additionally, separate work streams are ongoing pertaining to offtake agreements, debt package finance for construction and project-level development funding

Key Contracts and Suppliers
None stated.

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