Evolution Energy Minerals Ltd (ASX:EV1) is conducting a series of value engineering studies expected to improve the economics and reduce the carbon footprint of its Chilalo Graphite Project in Tanzania.
This value engineering initiative, led by executive director Michael Bourguignon, will be an ongoing process culminating in a construction decision in the second half of 2022. The decision will not be conditional on the outcome of the study.
The study is expected to focus on economic and environmental savings - often found together - with key areas for cost savings to be found in power generation and mining efficiencies.
“It is clear that there are several opportunities for cost savings, particularly in relation to mining costs and electrical power,” said Bourguignon, who has previous experience in the graphite market with Syrah Resources.
“Like most projects, Chilalo’s net present value (NPV) is most sensitive to commodity price and the strong positive trend in graphite prices is also expected to contribute to more favourable economics.”
Reduced carbon emissions
EV1 is targeting a net-zero carbon operation at Chilalo and with this in mind has engaged MinViro to assess the carbon footprint associated with the proposed mine.
To reduce its carbon footprint and deliver operating cost savings, the company is also talking to independent power providers to convert Chilalo’s proposed diesel-generated power supply to a hybrid solar/diesel solution.
Mining efficiencies
A review of the mine plan at Chilalo is anticipated to lower mining costs.
Earlier this year, the company started exploration to pinpoint undrilled high-conductance exploration targets on its tenement holdings.
Ground electromagnetics are used to identify high-conductance targets with a focus on high-grade, near-surface, coarse-flake graphite deposits.
The discovery of additional graphite deposits at surface can reduce the strip ratio, lower mining costs, extend the life of the mine and deliver an improved NPV.
Operational value
The nearby upgraded Mtwara Port facility provides both inspiration and potential for operational use, with scope to improve Chilalo economics and reduce carbon emissions.
While the ongoing value engineering is central to the company’s approach to continuous improvement, it is not expected to delay progress towards making a construction decision by late 2022.
The existing definitive feasibility study (DFS) is executable as it stands and the company expects to have the finance conversation while it rolls out its vital ESG framework.
Tenders in preparation
EV1 is preparing to tender a Front-End Engineering Design (FEED) package for the Chilalo Project, aimed at advancing the design sufficiently to identify and mitigate against potential risks to the schedule, and further define the project cost estimate.
Engineering firms from three separate continents have expressed a desire to be considered for this work and the EV1 will run a pre-qualification process to shortlist the most suitable applicants.
FEED work kicks off in the second quarter of 2022 with a timeline of around four months.
“We look forward to providing updates regarding further enhancements to the Chilalo Project in the coming months, ahead of a construction decision by the second half of 2022,” Bourguignon said.