Improved mine plan could double Armadale Capital’s graphite output

Improved mine plan could double Armadale Capital’s graphite output

Armadale's Mahenge Liandu graphite project. Image courtesy of Armadale
AIM-listed Armadale Capital’s could double graphite production from its Mahenge Liandu graphite project in south-east Tanzania via a staged four-year ramp-up process.

This follows the completion of a detailed improved mine plan produced by experienced graphite specialists BatteryLimits, which incorporates a ramp up to 500 000 t of processed ore after two years and to 1 Mt of ore after four years.

The improved mine plan brings production forward via a staged ramp-up that will initially focus on producing ore at a grade of 12-14% total graphitic carbon (TGC) for the first four years before averaging a grade of 9.5% TGC with a very low strip ratio as the plant ramps up to 1 Mtpa. The mine plan utilises less than 25% of the resource and includes only measured and indicated resources leaving potential to expand production further.

The results of a final round of metallurgical test-work are being completed at Bureau Veritas in Perth, Australia on high-grade composites of the diamond core with average grades of 14.9% and 15.6% TGC expected to be received later in March.  These results will be used to confirm the flow sheet for the higher-grade mineralisation.

Work to date has demonstrated the project’s potential as a commercially viable deposit, with significant tonnage, high-grade coarse flake and near surface mineralisation contained within one contiguous ore body.  The March 2018 scoping study demonstrated positive project economics with significant capacity for improvement.

Since this time, incremental improvements have been successfully delivered and it is anticipated that the forthcoming DFS will have significantly uplifted economics.

Following completion of the Mahenge mine plan, Armadale Capital can confirm that initial production start-up is planned to be considerably higher than the 49 000 tpa referred in the original scoping study.
Furthermore, using a staged production ramp-up, the mine plan allows for significant uplift in production capacity to a total of 100 000 tpa. A phased production profile will initially see increased starting production figures of 52 000 tpa further increasing to 66 000 tpa in year two and to 100 000 tpa in year four. The original scoping study was based on average annual production of only 49 000 tpa.
The results have been achieved through the identification of high grade material, a high-grade starter pit with an average grade of 13.2% over four years, and a strip ratio of 2.7.  After year four the grade averages to 9.5% with a low overall strip ratio of 0.7 to 1.  The staged increase in production allows a dramatic increase in production without increasing the initial capex. 
Furthermore, there remains significant scope to further improve returns with staged expansions as the current mine plan is based on circa 25% of the total resource.

Armadale Capital also expects that a staged ramp-up will enable operating costs to remain stable as output increases, maximising the value of the resource.

According to Armadale Capital chairman Nick Johansen, the company has long held confidence in the enormous commercial potential and economic value of its 100%-owned Mahenge Liandu graphite project. “As we near completion of the feasibility study the exceptional results received during the course of additional studies continue to reinforce this view. These results are expected to make a positive impact upon our DFS, which is nearing completion.

Further details will be provided in the forthcoming DFS.