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(Alliance News) - Armadale Capital PLC said Tuesday the revised mine plan for its Mahenge Liandu graphite project, in south-east Tanzania, will lead to higher annual production.
Armadale said that - following the update plan put together by "experienced graphite specialists" BatteryLimits - Mahenge will now average an annual output of 109,000 tonnes, a 30% increase.
Part of the plan is to use a higher cut-off grade, of about 9% total graphitic carbon, and a higher strip ratio of 1.95 to 1.
Armadale also said the revised plan could "significantly" increase the USD358 million net present value of the project.
"A higher-grade cut off is expected to allow the company to maximise initial production and build lower-grade stockpiles in subsequent years," Armadale said.
An updated feasibility study is expected in May.
Chair Nick Johansen said: "The updated mine schedule demonstrates the exceptional potential of the Mahenge Liandu graphite project. The use of a higher-grade cut off and mining of a higher-grade material at an increased pace leaves significant scope for the Project to produce higher volumes of graphite over the 15 year mine life at a higher [earning before interest, tax, depreciation and amortisation] margin, thus enhancing its overall near-term upside.
"The project has a relatively long life of mine, low cost of production and has now been significantly de-risked at a time of rapidly increasing demand for large-flake graphite. As such it represents an attractive opportunity for investors who wish to gain exposure at a crucial inflection point in its development."
Johansen also noted Armadale is making progress with other aspects of the project.
He added: "In addition to this work, multiple workstreams are currently in progress including continued detailed design engineering, the progressing of existing off-take agreements from MoUs to binding agreements, finalising of the company's application for a full mining licence (and thus furthering major permitting milestones), and crucially, advancing discussions with potential debt finance partners and project level development funding for construction."
By Paul McGowan; paulmcgowan@alliancenews.com
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