Africa|5 September 2014Last updated at12:50 CET
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Kibaran Fast-Tracks Epanko Development
Kibaran Resources (ASX: KNL) has commenced fast-tracking its Epanko Graphite Deposit towards production, Executive Director Andrew Spinks told delegates at the Paydirt Africa Down Under 2014 Conference in Perth, Australia, today.
The Company recently released an updated scoping study for Epanko – located within the Mahenge Graphite Project in Tanzania – following an upgrade to the JORC Mineral Resource Estimate to an Indicated Mineral Resource of 12.8 million tonnes at 10% total graphitic carbon for 1,281,200 tonnes of contained graphite.
The study estimated the capital cost for Epanko at A$56 million for an operation that produces 40,000 tonnes per annum of graphite concentrate while operating costs have been pegged at A$489/t. The Net Present Value (NPV) has been projected at A$213 million, with a capital payback period of 2.5 years and a mine life of 27 years.
Earlier this week the company appointed GR Engineering Services Limited ('GRES') (ASX: GNG) to undertake the feasibility and project evaluation study for its Epanko Graphite Deposit in Tanzania. Under the agreement GRES will provide its services to Kibaran exclusively in terms of graphite projects within the Southern African Development Community (SADC) group of Countries, which includes Mozambique, Malawi and Madagascar amongst others.
Kibaran secured its first binding, take or pay graphite offtake agreement for Epanko late last year, with an as yet undisclosed European graphite trader – becoming the first publicly listed company to secure a binding agreement in the sophisticated European market.
Mr Spinks expanded by saying ‘Kibaran is in continuing discussions regarding a second but separate binding offtake agreement for the Company’s flagship Epanko Graphite Deposit. Whilst again we are not prepared to disclose the name at this point, we can say it is with a major industrial group in Europe. The graphite sector is very competitive in terms of securing market share and as such, Kibaran has actively protected its competitive edge by securing binding agreements, including the exclusive agreement with GRES and by not making public our current and prospective offtake partners prematurely.’
This strategy forms part of a broader Tanzanian focus, which includes a Memorandum of Understanding (MOU) agreed to earlier this year with AIM-listed Richland Resources subsidiary TanzaniteOne Mining and Tanzanian State Mining Corporation (STAMICO). Kibaran is hopeful all parties will finalise and execute a binding agreement in due course and the graphite assets within the Merelani area will be consolidated to provide a second frontier of premium quality graphite production from within Tanzania