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May 2017
MODERN MINING
17
MINING News
Tanzanian graphite developer Black Rock
Mining, listed on the ASX, has completed
the Preliminary Feasibility Study (PFS) for
its 100 %-owned Mahenge graphite proj-
ect. The company says the study confirms
Mahenge’s outstanding potential as a long-
life, low-capex, high-margin operation.
The PFS is based on mining and milling
61,1 Mt of resource and reserve at an aver-
age grade of 8,9%Total Graphitic Contained
(TGC) for a life of mine (LoM) production of
5,1 Mt of concentrate. The LoM strip ratio
is exceptionally low, at 0,8 to 1, benefiting
from an even distribution of mining mate-
rial at high grades through both pits.
Metallurgical test work indicates the
concentrate will have commercially desir-
able product size and purity attributes. The
mine plan is also advantaged by bulking
in all mineralisation above cut-off grade
resulting in limited need for costly selec-
tive mining methods.
Pre-production capex is estimated at
US$90,1 million with total capex estimated
PFS confirms Mahenge’s long-life, low-capex potential
at US$159 million including Stage 2 and a
15 % contingency. Key financial metrics
include a post-tax, unlevered, IRR of 48,7 %
and an NPV using a discount rate of 10 % of
US$624 million.
Mining will be by owner-operator using
conventional open-cut mining techniques.
The mining strategy is to mine out the
lower strip ratio Ulanzi deposit, followed
by the Cascade deposit commencing in
year 13. Processing will be by well-proven
crushing, grinding and flotation methods.
“The PFS builds on a compelling scop-
ing study and reconfirms the Mahenge
graphite project’s potential to be a globally
significant graphite producer, with indus-
try leading low capex, and sustained high
margins,” says Black Rock’s Interim CEO
and Executive Director, John de Vries. “The
mine metrics are driven by low strip ratios
and high grade ore that can be relatively
simply converted into large high purity,
premium flake concentrates.
“Mahenge is financeable with a unique
combination of ultra-low pre-preproduc-
tion capex, sustained bottom quartile
operating costs and a premium high purity
large flake product that – as an investment –
is simply not available in any other projects.
“Our staged development model of
two 83 kt per annum modules is unique
in our sector. The approach is to be large
enough to be investable but small enough
not to disrupt the overall flake market,
while generating sufficient cash to self-
fund the second module. The self-funding,
sequential module strategy is sized to
accommodate the expanding market in
high purity flake without being overly dis-
ruptive. It simplifies and de-risks our build
by utilising modular assembly and flat-
pack, off-site construction where possible.
“We are now completing negotiations
with DFS and construction partners and
expect to commence work quickly on opti-
mising the PFS and commencing detailed
engineering with a view to commencing
construction in 2018.”