BlackEarth Minerals NL (ASX:BEM) has produced a new 2021 scoping study for its 100%-owned Maniry Graphite Project in Southern Madagascar, with significantly improved outcomes and longer project mine life.
The new assessed mine life is based on mining 100% of the stated indicated resource and 20% of the inferred inventory.
BEM expects to commence production at around 2,000-2,500Mtpa, with plans to increase to 4,500Mtpa as soon as possible.
There is upside potential from ongoing infill drilling and other exploration programs.
Decreased operating costs
Through the implementation of a large mineral resource, with higher grades, the company has been able to achieve substantial operating cost efficiencies.
Stage 1 capital expenditure analysis has resulted in reductions for some infrastructure and mine camp development costs.
This has been achieved by assessing the cost of buildings on-site and by allowing parts of the workforce to drive to the site each day.
Other infrastructure and consultants costs have been reduced in Stage 1 and 2 following a review of these.
Non-mining costs are reduced as a result of an assessment of manning costs on-site, within country and in Australia.
As part of its environmental, social and governance (ESG) policy, the company is committed to employ 80-90% of its employees from the regional community.
Savings in mining and mining-related costs amount to around US$35 per tonne of concentrate produced.
Other savings relate to logistics costs, general administration costs and the cost of non-mining related employee costs.
Updated production/processing plan
Its production profile assumes processing of 500,000 tonnes of graphite ore per annum for years one-three for Stage 1, increasing to 1 million tonnes per annum for years four onwards in Stage 2.
Extension from the stated mine life may be achieved only by increases in the company’s stated indicated or greater resource.
Joint venture with Metachem
On its joint venture agreement with Metachem, the world-leading expandable graphite producer, the company said highlights of the assessment of this project and its impact on BlackEarth’s Updated Scoping Study were:
➢ Detailed capital expenditure and operating expenditure plan and budget developed;
➢ Site selection is well advanced with selection of the preferred site imminent;
➢ Metachem JV has an offtake agreement to sell all Stage 1 production to Grafitbergbau, Austria;
➢ The company expects to commence production at around 2,000-2,500Mtpa with plans to increase to 4,500Mtpa as soon as possible;
➢ BlackEarth will secure an independent supply of around 2,000-2,500 Mtpa of graphite concentrate for the first 1 -2 years of operation then supply a portion of its graphite concentrate produced to the JV operations; and
➢ It is projected that upon commencement of production, around 7-10% of graphite concentrate production from Maniry annually will be provided to the JV operations.
BEM shares were as much as 9.6% higher to A$0.115.