Dar es Salaam. Armadale Capital Plc plans to start mining high-grade graphite at the Mahenge Liandu Project in Morogoro early next year.
The notice was published in its final results for the year ended December 31, 2017, stressing rapid advancement decision to mine the graphite in the first quarter of 2019.
The project is located in Ulanga District, close to existing transport infrastructure. It is 10km south of the Mahenge town and about 76km via a well-maintained road to Ifakara.
Armadale director Nick Johansen said in the statement that since 2017 the company saw potentials of pure graphite at the area after conducting a through feasibility study and other early processes.
“Early exploration and definition drill programmes, metallurgical test work, feasibility studies, permitting activities and commercial marketing are all being conducted concurrently to ensure we meet this ambitious target and start delivering returns for our shareholders,” he said. The quality is exceptional, with concentrate purity of up to 99.1 per cent Total Graphitic Carbon (TGC) produced using low-cost processing methods, and desirable flake size distribution and graphite expandability attributed to the material from Mahenge Liandu.
“We are passionate about beginning the formal marketing process of our product within markets including the high growth battery industry.”
Mr Johansen explained that it is with this in mind, together with a project which has consistently demonstrated its considerable economic and strategic value, that the company looks forward to providing investors with additional news over the coming months as they are gearing up to make a formal decision to mine in the quarter one of 2019.
The project is expected to produce an average of 49,000tpa of high quality graphite products for a 32 year mine life.
Again, operational cost stands at $408 per tonne and is based on an average life of mine grade of 12.5 per cent TGC.
The project has a pre-tax of 122 per cent with a low development capital expenditure of $35 million with the maximum drawdown during the construction of the project is $34.9 million and the after-tax payback period is 1.2 years
There remains significant scope to further improve returns, with staged expansions as the current mine plan is based on 25 per cent of the total resource.