Modern Mining April 2020

GRAPHITE

Compelling economics for Mahenge project A Definite Feasibility Study has confirmed the Mahenge Liandu graphite project in south-east Tanzania – owned by Armadale Capital, the AIM listed investment group focused on natural resource projects in Africa – to be a large, long-life, low-cost graphite deposit with US$358-millon NPV and IRR of 91%. By Munesu Shoko .

A s anticipated, the Definitive Feasibility Study (DFS) for the Mahenge Graphite Project has delivered extremely compelling economics. Nick Johansen, Armadale chairman, says the study represents one of the most significant de-risking milestones in the company’s history to date and the board is delighted with the outcome. “Across all commodities globally, there are few mining projects that can demonstrate economics such as a 91% IRR (Internal Rate of Return) and an 18-month payback upon capital. The DFS shows that Armadale can be a significant low-cost supplier to the graphite industry with the potential to generate pre-tax cashflows of US$882-million over an initial 17-year mine-life and scope for further improvement,” says Johansen. Compelling economics, combined with low technical risks and 100%

ownership, make Mahenge an incredibly attractive investment. Agreements with a number of potential offtake partners have already been secured and with the delivery of the data from the DFS, the company is now in a strong position to move these agreements further forward in addition to advancing workstreams on potential debt finance packages and project level development funding for construction. Project summary Armadale’s wholly-owned Mahenge Liandu Graphite Project is located in a highly prospective region, with a high-grade JORC compliant indicated and inferred mineral resource estimate of 59,5-million tonnes (Mt) at 9,8% Total Graphitic Carbon (TGC). This includes 11,5 Mt @ 10,5% Measured 32 Mt Indicted at 96% and 15,9 Mt at 9,8% TGC, making it one of the largest high-grade resources in Tanzania. Based on this resource, the DFS was initiated in October 2019 based on a two-stage project expansion strategy comprising:

Reverse Circulation drilling at Mahenge Liandu graphite project in Tanzania.

22  MODERN MINING  April 2020