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April 2016
MODERN MINING
7
MINING News
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.
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.”
Scoping Study on Tanzanian graphite
project delivers robust results
Proposed pit shells for the Ulanzi and Cascades deposits at Mahenge.
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.