Modern Mining April 2016

MINING News

Scoping Study on Tanzanian graphite project delivers robust results

expected to average 1,9 g/t. Capital costs for the additional 18 000 t/d expansion are forecast to be US$620 million, plus incre- mental estimated capitalised stripping of US$119million (2016-2019). The combined estimated total capital expenditure for Phase One and Phase Two will be approxi- mately US$920 million. A feasibility study of Phase Two is expected to be initiated in the second half of 2016, with a potential go-ahead decision targeted for the end of 2017 and construction anticipated to commence in early 2018. Based on this timeline, Phase Two could potentially reach full produc- tion in early 2020. “This phased approach allows Kinross to transform Tasiast into a lower cost, cash flow positive operation in the near term while preserving the operation’s signifi- cant growth potential,” comments J Paul Rollinson, President and CEO of Kinross. “Phase One, which is expected to reach full production by the end of Q1 2018, will require an estimated initial capital invest- ment of approximately US$300 million, to be self-financed by the company. The expansion is forecast to reduce Tasiast’s production cost of sales per ounce by an estimated 48 % while increasing annual production by an estimated 87 % com- pared with 2015. The Phase One expansion has robust standalone economics, includ- ing a positive 20 % expected internal rate of return. “Phase Two, which anticipates increas- ing total throughput to 30 000 t/d, underscores Kinross’ focus on financial discipline. The forecast total capital expen- diture for the combined Phase One and Two has been significantly lowered com- pared to previous expansion studies. With lower capital required, the expected ben- efits remain compelling, with a 30 000 t/d Tasiast expected to be the company’s larg- est and lowest cost operation with a long estimated mine life. “The two-phased approach strikes the right balance between growth and preserving balance sheet strength and is well-suited to the current gold price envi- ronment. Phase One achieves Kinross’near term goals with a manageable investment while allowing the company to reassess market conditions and further optimise the project before deciding to proceed with Phase Two. In short, this is the right project for Kinross at the right time.” 

ASX-listed Black Rock Mining has com- pleted an independent Scoping Study over its flagshipMahenge graphite project in the south of Tanzania. The study, completed by consultant BatteryLimits, returns robust conceptual economics for a 52 000 t/a graphite concentrate mining operation over a 25-year mine life with a two-year payback estimated on the US$57,3 million capex. The NPV is estimated at US$285,7 million and the IRR at 62 %. Following the receipt of positive results from the Scoping Study, Black Rock Mining has now commissioned a Pre-Feasibility Study over the Mahenge graphite project. The company has also commenced more detailed metallurgical test work to con- tinue optimising the process flowsheet and will begin a final drill programme in April to upgrade the current 131,1 Mt at 7,9 % Total Graphitic Content (TGC) mineral resource and provide additional metallurgical samples. The resource is the largest – and has the highest grade – of any graphite deposit in Tanzania and is also reportedly the fourth largest globally. Some 40 % of the resource tonnes are in the indicated category. Mining costs of US$5,0/t have been assumed for both ore and waste at an ore to waste strip ratio of 1:1,23. There is signifi- cant scope to improvemining costs through optimising the strip ratio, re-calculating the cost of free digging material for the top 20 m of the resource, reviewing an owner’s fleet, and adjusting the cut-off grade.

The flowsheet incorporates primary and secondary crushingwith the ore then being wet groundby a primary rodmill for concen- tration by flotation. Graphite concentrate will be recovered by flotation roughing, cleaning and scavenging stages with re- grind targeting coarse graphite recovery. Concentrate will be dried, screened to vari- ous sizes and bagged for transport. “The company is extremely excited to announce the results from the indepen- dent Scoping Study over the Mahenge graphite project,” says Black Rock’s Managing Director, Steve Tambanis. “The results provide further validation of the company’s exploration work at the Mahenge graphite project and underpin the potential for Black Rock Mining to become a significant Tanzanian graphite producer. In particular, we are excited that the Scoping Study indicates that a rela- tively straightforward and small-scale plant of 52 000 t/a can offer potentially high returns due to the high-grade, near surface and coarse flake nature of the resource. A smaller, relatively simple plant will require less capital and time to develop and in turn decreases commissioning risk.” The Scoping Study reviewed three pro- duction scenarios: 31 000 t/a, 42 000 t/a and 52 000 t/a. The 52 000 t/a case predict- ably returned the best economics of the three alternatives due to scale economies and, as such, is the assumed production case. A larger throughput option will be reviewed as part of the next stage of eco- nomic assessment. 

Proposed pit shells for the Ulanzi and Cascades deposits at Mahenge.

April 2016  MODERN MINING  7