PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Chilalo graphite project, in Tanzania, has confirmed the project economics, with ASX-listed Graphex Mining telling shareholders on Wednesday that the company was continuing discussions with financiers with the aim of starting production by the fourth quarter of 2021.
The DFS was based on throughput of 500 000 t/y to produce about 50 000 t/y of graphite, with the preproduction capital cost estimated at $87.4-million.
The study estimated a post-tax net present value of $331-million and a post-tax internal rate of return of 36%, with Chilalo anticipated to generate average earnings before interest, taxes, depreciation and amortisation of $74-million a year, over its 18-year mine life.
“The DFS demonstrates that Chilalo will be a robust project based on a probable reserve of 9.2-million tonnes, underpinning an estimated 18-year mine life producing approximately 50 000 t/y of high-value graphite products,” said Graphex MD Phil Hoskins.
“The Chilalo project demonstrates strong margins and cashflow with substantial opportunities for improvement through exploration, production expansion and continued advancements in the company’s value-added product strategy.”
Hoskins noted that with key approvals in place, including the mining licence, environmental certificate and community relocation arrangements and compensations having been agreed and approved, Graphex was in a strong position to start development, with first production by the fourth quarter of 2021.
“We now look forward to finalising the financing arrangements for the development of Chilalo,” he added.
In the coming months, the ASX-listed company will focus on finalising funding arrangements for Chilalo, as well as advancing discussions with potential customers as part of a progression towards binding sales agreements.
A final investment decision is targeted for the second quarter of this year.