Graphite, nickel and copper developer Blencowe Resources has completed a prefeasibility study (PFS) for its flagship Orom-Cross graphite project, in Uganda, on time and under budget.

The PFS points to a 14-year life-of-mine (LoM) for the operation, with a net present value (NPV) of $482-million.

Orom-Cross has an existing Joint Ore Reserves Committee-compliant standard resource of 24.5-million tonnes at 6% presenting from surface, providing for a shallow, low-cost, openpit mining operation.

All mining within the first 14 years will be done from surface to a depth of 25 m, and an extended mine life can be obtained at any stage by drilling additional ready-targets, the company reports.

Considerable metallurgical test work has been done on Orom-Cross’ end-products to determine their chemistry and characteristics, indicating that they can deliver a high quality of about 96% loss on ignition concentrate.

The project’s internal rate of return is 49%, with an operating cost of $499/t and a forecasted $1 307/t weighted average sales price for its basket of end-products.

To develop the project, the new PFS – conducted by Australia-based technical experts Battery Limits – points to a 23% reduction in startup costs, when compared with the preliminary economic assessment (PEA) of 2021, to $62-million, of which 44%, or $27.3-million, will go towards establishing a processing plant.

Blencowe executive chairperson Cameron Pearce says the PFS represents a “major milestone” for the Orom-Cross project with “outstanding” results.

“We have considerably outperformed the 2021 PEA in all key areas, while also reducing the initial capital requirement by 23%.

“The Orom-Cross NPV is excellent, especially in relation to this lower capital expenditure, and proves that this is a standout graphite project. [Orom-Cross’] concentrate is of high quality with specific element content that is unique and which will elevate market demand for all of the end-products we sell.

“Selling graphite is one of the key challenges for a successful operation, so this is critical,” Pearce adds.

Once operational, the project is expected to achieve earnings before interest, taxes, depreciation and amortisation of $1.4-billion, averaging at about $100-million a year over the LoM.

As such, the PFS suggests the project will deliver net cash of $1.07-billion over the LoM.

As per the PFS, Blencowe plans to mine about 600 000 t/y of ore from the date of commissioning, increasing to 2.4-million tonnes a year by the time the project is fully ramped up in year ten.

Mining will be free-dig with no drill and blast requirement, with initial ore coming from saprolite (clay) and moving into fresh ore once depths of 15 m to 20 m are reached.

Both of the deposits identified in the drilling programmes – Northern Syncline and Camp Lode – will be mined and a composite blend of both will be input into the processing plant that is to be built on site.

An initial 36 000 t/y of end-product as concentrates will be delivered from the plant, which increases in two additional stages to 147 000 t/y once the mine is fully ramped up.

About 35% of these end-products will be coarse flakes and about 50% will be in the +100 to +50 mesh higher-value categories.  The remaining smaller flake products can be sold into the fast-emerging battery market, which is forecast to grow considerably over the long term, thereby providing a channel for incremental growth and sales.

“As a result of 50% of the end-products being larger flake size categories, Orom-Cross has a substantial weighted average selling price for its basket of end-products, yet it also has one of the lowest total operating costs of any graphite project worldwide,” says Pearce.

Blencowe foresees flake graphite demand moving into a significant supply deficit in the medium term, as increased demand for electric vehicles lifts demand for lithium-ion batteries – of which graphite is a non-replaceable input material.

Going forward, Blencowe is moving towards initial production at Orom-Cross by the second half of 2023.

Meanwhile, Orom-Cross benefits from considerable key infrastructure already being in place, such as existing tarred roads from the regional centre Kitgum (90 km from site) all the way through to Mombasa port in neighbouring Kenya. The road from Kitgum to nearby Orom (10 km from site) will be tarred by 2025, with related work already under way. 

Blencowe will establish local roads required around the mine site.

Power will be connected to the national grid, which is currently nearby at Orom and will provide lower cost, energy-efficient hydropower, while wireless communications will be connected on site.

Further, Blencowe reports “plentiful” water on and around the site, while boreholes will be sunk for clean water.

A smaller processing facility and mine camp will be established for initial-stage production from 2023 to deliver bulk samples for pre-qualification. A larger camp will be built, together with additional plant, storage, administration offices and a larger tailings facility, prior to the 2025 main start-up.