Name of the Project
Mahenge Liandu graphite project.

Location
South-east Tanzania.

Project Owner/s
Aim-listed Armadale Capital.

Project Description
An updated definitive feasibility study (DFS) has reaffirmed Mahenge as a long-life low-cost graphite project.

The updated DFS envisages a staged ramp-up to facilitate near-term production, with 60 000 t/y graphite concentrate to be produced for the first three years (Stage 1) before increasing to a life-of-mine (LoM) average of 109 000 t/y (Stage 2).

The LoM has decreased from 17 years in the DFS to 15 years in the updated DFS using only 25% of the project’s resource, which remains open in multiple directions offering significant upside to the project.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project’s net present value has increased from $358-million in the March 2020 DFS to $430-million in the June 2020 updated DFS. The internal rate of return has remained the same and the project has a 1.6-year payback after tax.

Capital Expenditure
Capital expenditure for Stage 1 has increased marginally from $38.6-million in the DFS to $39.7-million in the updated DFS.

Stage 2 is expected to be funded from cash flow.

Planned Start/End Date
The projected timeline to first production is expected to be about 10 to 12 months from the start of construction.

Latest Developments
Armadale Capital has made further progress towards commercial production at the Mahenge Liandu project.

This is an important strategic development as part of ongoing plans to expedite the path to commissioning commercial mining operations, the company has said.

The board has accelerated the development of the mining lease at Mahenge Liandu on several fronts, which collectively enhances the progression towards commercial mining operations.

This includes the group’s continuing to collect environmental baseline data as required for the compliance of the mining lease and to assist in designing and planning the proposed mining operations.

In addition, the baseline data for temperature, pressure, wind, moon phase, humidity, solar radiation, rainfall and stream flow data assists the local community in having access to regional weather data for local planning requirements in the Mahenge region.

Planning is under way for Geotech drilling to begin in the dry season, with the sites now prepared for the drill rig.

The information from the proposed drilling programme will allow for  the design of a plant and tails storage area. This information will enhance the data from the test pits that were completed in 2022.

Logistics routes for the product continue to be assessed to determine the optimum methods to ensure the final product will enter the market at the desired price level.

Discussions are ongoing with the government of Tanzania regarding the framework for the 16% ownership, with draft shareholder agreements, articles of association and joint financial models being submitted to both parties for review.

The group is continuing discussions with several potential financing partners regarding the debt funding required for project development.

Moreover, significantly improved market fundamentals and conditions for graphite have resulted in an increase in interest from stakeholders capable of providing long-term project finance, Armadale has noted.

With the post-Covid-19 improvement in graphite market fundamentals globally, the board has started re-engaging with prospective end-users in Europe and China.

“More importantly, the board is re-doubling efforts to secure long-term project finance from a reputable provider and lining up offtake partners to generate a clear road map to commissioning a viable commercial mining operation,” Armadale director Nick Johansen has said.

Key Contracts, Suppliers and Consultants
None stated.

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