Black Rock Mining (ASX:BKT) is expecting to release the results of an updated pre-feasibility study this quarter on its flagship Mahenge graphite project located in Tanzania.
The upgraded study will build on the March 2016 results to incorporate the recently delineated high grade portion of the Cascades deposit within the Mahenge project.
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 company’s focus remains on ensuring it has industry leading low pre-production capex for a scalable operation that can deliver high quality products.
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 one of the largest JORC graphite resources 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 increased its total resource to 203 million tonnes at 7.8% 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.
Backed by leadership
Black Rock is committed to building a capable team of professionals to design, construct and operate the graphite mine and spheronising plant.
The senior management team is to consist of seven professionals with three positions now filled and ongoing discussions to fill the remaining roles with the right mix of experience and passion.
The majority of positions are to be filled in the current March quarter.
Black Rock is preparing for a rapid transition from updated pre-feasibility study into detailed engineering phase and mine construction planning at Mahenge.
Shares on the move in 2017
Black Rock shares are trading up 25% year to date, currently priced at $0.15.
With test-work showing concentrate grades of 99+% are able to be produced via simple flotation circuit and combined with a shallow, high grade resource, operating costs are forecast to be industry leading.
Furthermore, spherical graphite has been produced and battery cell testing is returning positive results, providing opportunities to target the growing high-value battery market.
The updated pre-feasibility study due this quarter is expected to deliver similar pre-production capex and cash costs for an initial 50,000 to 60,000 tonnes per annum operation growing over three phases to over 200,000 tonnes per annum.
The March 2016 already has shown Mahenge to have industry-leading pre-production capex, absolute flake size and concentrate grade.
Black Rock has a long term EBITDA target of US$150 million per annum and its current undiluted market cap is A$47 million.