PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Mahenge graphite project, in Tanzania, has increased the capital cost of the project, while both the estimated net present value (NPV) and internal rate of return (IRR) have dropped.
ASX-listed Black Rock Mining on Wednesday revealed that the Phase 1 capital expenditure has increased from the $90.7-million estimated in the 2017 prefeasibility study (PFS), to $115-million, while the Phase 2 capital cost have decreased from $72.2-million to $69.5-million, and the Phase 3 costs have increased slightly from $81.7-million to $84.2-million.
The project’s post-tax NPV declined from the $1.1-billion to $895-million, while the post-tax IRR decreased from 50.1% to 42.8%.
The project’s mine life has remained unchanged at 32 years, with average steady-state production also being maintained at 250 000 t/y.
“When setting out to deliver our DFS our primary objective was to develop the study to the point where it would support a bankable level of due diligence,” said Black Rock CEO John de Vries.
“With over 25 000 person hours using consultants and contractors with real graphite mine construction and operations’ experience, I am very confident we have differentiated ourselves, and delivered on that outcome.”
De Vries said that the core element of the DFS was the operation of the 90 t pilot plant, the largest plant ever run in the graphite sector at DFS stage.
“The plant provided invaluable data and operating performance for process plant design and flowsheet optimisation. Critically, the plant also delivered eight tonnes of concentrate with which we could engage customers and develop a dialogue around preferences and product attributes.
“We are confident that our approach to market segmentation, and a focus on channel strategy based on credible volumes of real products, will yield results with product offtake.”
Black Rock recently signed an offtake agreement with China’s Heilongjiang Bohao Graphite Company for natural flake graphite from the Mahenge project.
The three-year agreement would see Black Rock supply 30 000 t in the first year, 50 000 t in the second year, and up to 90 000 t in the last year of the offtake.