Black Rock Mining (ASX:BKT) has decided to upgrade its pre-feasibility study to incorporate the recently delineated high grade portion of the Cascades deposit at the Mahenge graphite project located in Tanzania.
The company plans to minimise capital expenditure through an initial production rate of 60,000 tonnes per annum graphite concentrates from first stage and then expanding to120,000 tonnes per annum.
A third stage expansion of an additional 100,000 tonnes per annum is also being evaluated at scoping study level.
The pre-feasibility study is now due for completion in Q1, 2017.
Steven Tambanis, managing director, commented:
"We have taken the opportunity to substantially increase our target for steady state production from our scoping study to take advantage of our 15.9 million tonne contained graphite Mineral Resource whilst ensuring our pre-production capex remains at an industry leading level."
Background
Black Rock owns graphite tenure in the Mahenge region, Tanzania, a country that hosts world‐class graphite mineralisation.
The Mahenge project resource is comprised of three deposits – Ulanzi, Epanko and Cascade and is the fourth largest JORC graphite resource globally.
On 12 December 2016, the company reported a substantial increase in its Cascades resource estimate to 53 million tonnes at 8.3% total graphitic content (TGC) including a high grade portion of 14 million tonnes at 12.1% TGC.
This high grade portion is expected to have low strip ratios and similar metallurgical characteristics as Ulanzi, which should deliver a high purity concentrates from simple flotation circuit processing.
It is expected to deliver the Mahenge graphite project industry leading low capital and operating costs.
Coupled with this development, the company has also decided to plan for a much larger mine to be delivered in stages.
The key objective for the base case scenario is lowest possible capex at optimum production levels.
Spherical graphite scoping study
The company has completed a substantial first pass evaluation of spherical graphite potential for its high purity graphite concentrates.
Black Rock has demonstrated the ability to make high purity graphite that exceeds the strictest battery specifications achieving up to 99.9999% purity.
Coated spherical graphite was manufactured in December 2016 and is being used for the company’s first battery cell test program.
Bulk and pilot scale testing of graphite ore is taking place in January 2017 to confirm a final flotation processing flowsheet and to provide bulk quantities of high purity graphite for commercial scale spheronising tests.
Quotes are being received to provide detailed capital and operating costs of spherical graphite production and purification with the objective of delivering a spherical graphite scoping study by end of Q1 2017.
Analysis
The high grade portion of the Cascades deposit is exceptional in terms of tonnage and grade and is expected to materially enhance the Mahenge Graphite Project pre-feasibility study.
Importantly, the newly proposed ramp up profile will appropriately match the likely growth in demand for Black Rock’s graphite product over the next decade; ensuring market penetration assumptions are defendable.
Furthermore, former managing director of ASX listed Highfield Resources Ltd, Anthony Hall, has been appointed head of strategy under an initial twelve month consulting contract to further develop and help execute corporate strategy.
Hall led the team responsible for developing Highfield’s potash projects in Spain from a concept into world class potash projects and considers the Mahenge Graphite Project to be endowed with sector leading attributes.
His appointment is the first step to expanding the company’s technical and management capabilities with the intention of taking the Mahenge Graphite Project into production.
Shares in Black Rock are up 190% year to date and have popped 20% intra-day, currently trading at $0.145.
Black Rock’s ongoing focus is to develop this resource into a long life, low cost mining operation and the release of the pre-feasibility study is expected to be highly anticipated by the market.