Aim-listed Armadale Capital says it has made further progress advancing towards commercial production at the Mahenge Liandu project, in Tanzania.
This is an important strategic development as part of ongoing plans to expedite the path to commissioning commercial mining operations, the company points out.
Moreover, Armadale highlights the improved investment climate which brings with it increased potential to attract development funding in Tanzania.
Armadale also mentions the significant progress made at the neighbouring Black Rock Resources project over the last 12 months.
The board has accelerated the development of the mining lease at Mahenge Liandu on several fronts, which collectively enhances the progression towards commercial mining operations.
This includes the group continuing to collect environmental baseline data as required for the compliance of the mining lease and to assist in the design and planning of the proposed mining operations.
In addition, the baseline data for temperature, pressure, wind, moon phase, humidity, solar radiation, rainfall and stream flow data assists the local community to have access to regional weather data for local planning requirements in the Mahenge region.
Planning is under way for Geotech drilling to begin this dry season, with the sites now prepared for the drill rig.
The information from the proposed drilling programme will enable the design of a plant and tails storage area. This information will enhance the data from the test pits that were completed last year.
Logistics routes for the product continue to be assessed to determine the optimum methods to ensure the final product will enter the market at the desired price level.
Discussions are ongoing with the government of Tanzania regarding the framework for the 16% ownership, with draft shareholder agreements, articles of association and joint financial models being submitted to both parties for review.
The group is continuing discussions with several potential financing partners regarding the debt funding required for project development.
Moreover, significantly improved market fundamentals and conditions for graphite have resulted in an increase in interest from stakeholders capable of providing long-term project finance, it highlights.
Graphite prices have continued to increase owing to strong ongoing demand from the electric vehicles sector, while Benchmark Mineral Intelligence sees further price upside owing to a potential supply deficit materialising this year. Current prices are materially above the level used in the company’s feasibility study.
Integral to securing project funding is lining up future offtake partners, Armadale notes. With the post-Covid-19 improvement in graphite market fundamentals globally, the board has started re-engaging with prospective end-users in Europe and China.
“With the global graphite market in the midst of a cyclical upswing, due to strong underlying fundamentals stemming from the buoyant electric vehicles sector, the board remains squarely focused on progressing plans to secure the framework agreement with the Tanzanian government regarding the 16% ownership.
“More importantly, the board is re-doubling efforts to secure long-term project finance from a reputable provider and lining up offtake partners to generate a clear road map to commissioning a viable commercial mining operation,” comments Armadale director Nick Johansen.
Source: Mining Weekly