Modern Mining November 2018

GRAPHITE

PFS reveals compelling case

While there are any number of graphite projects under development in Africa (mainly in Tanzania and Mozambique), Australian company Sovereign Metals, listed on the ASX, believes its Malingunde project in Malawi is one of the best, with a just released Pre-Feasibity Study (PFS) demonstrating that it has low operating and capital costs providing excellent margins. According to Sovereign, the project’s compelling numbers can be attributed to the deposit being hosted entirely by soft saprolite material, its high grade and the excellent infrastructure availability.

T he PFS shows the project’s low capital (US$49 million) and very low operating costs (an average of US$323/tonne of concentrate) are at the bottom of the graphite supply cost-curve at a scale appropriate for the current market. The project would produce 52 000 t/a of high-quality concentrate over a mine life of

Recent mechanical, wide- diameter auger bulk sample drilling at Malingunde.

16 years and deliver an average EBITDA of over US$42 million per annum over this period. The NPV is estimated at US$201 million pre-tax, using a conservative, long-term average basket pricing assumption of US$1 216 per tonne of concentrate. Payback is put at three years from the start of production. Commenting on the PFS, Sovereign’s MD, Dr Julian Stephens, says that the company believes Malingunde to be the world’s best flake graphite project. “The high-grade, soft, free-dig sapro- lite-hosted ore, requiring no primary crush or grind, combined with a simple and proven flowsheet, results in low capital intensity and extremely low operating costs. Malingunde is an unparalleled, low technical risk, high mar- gin project that provides significant cashflows with substantial upside scalability into a grow- ing graphite market.” Soft-saprolite-hosted graphite deposits are sought after as they have distinct operating

28  MODERN MINING  November 2018