Evolution Energy Minerals Ltd (ASX:EV1) has utilised results from electromagnetic (EM) surveys to highlight the potential for a material expansion in graphite resources at the Chilalo Project in southern Tanzania.
A recently completed fixed loop electromagnetic (FLEM) program identified more than 33 kilometres of high or ultra-high-conductance graphite targets that have the potential to lead to multi-decade mine life and production expansions.
In addition to existing resource
These are in addition to the existing Chilalo mineral resource, which is on a 2-kilometre high-conductance response and already supports an 18-year mine life.
The project currently hosts a high-grade resource of 20.1 million tonnes at 9.9% total graphitic carbon (TGC) for 1.991 million tonnes of contained graphite along with a low-grade resource of 47.3 million tonnes at 3.5% TGC for 1.677 million tonnes.
“Scope for significant growth”
EV1 managing director Phil Hoskins said: “We are extremely encouraged by these results, demonstrating the scope for significant growth in the Chilalo mineral resource.
"We already have an 18-year mine life based on ore reserves and resource growth is therefore not a pre-requisite for the financing or development of Chilalo.
"It is our intention however to demonstrate that Chilalo has globally significant scale with the potential for significant resources and reserve growth and the ability to ramp-up production to meet the rapid growth in demand for lithium-ion batteries, in which graphite makes up over 50% of the contained raw materials.”
Given graphite’s high conductivity level, these conductors are expected to represent near-surface, high-grade and thick graphite deposits.
Exploration upside
The Chilalo definitive feasibility study (DFS) identified a number of opportunities that could improve the project’s economics, one of which was exploration upside.
The discovery of any additional near-surface high-grade deposits have the potential to contribute to a reduction in mining operating costs compared to those in the DFS, by deferring the need to mine the existing deposit to the depth assumed in the DFS.
The various strengths of FLEM conductors within the company’s tenement holdings. Noting that the Chilalo resources and reserves are on a 2-kilometres high-conductance target, these most recent FLEM results have identified 8 kilometres of very high conductance (stronger than Chilalo), 25 kilometres of high conductance and 22 kilometres of low conductance. There remains 31 kilometres of EM targets identified by airborne EM that are yet to be followed up by ground-based FLEM.
Potential to enhance economics
Discovering additional near-surface high-grade graphite is expected to enhance the economics of the Chilalo Project by:
- Reducing mining costs with shallower pits, lowering the strip ratio;
- Extension of mine life; and
- Providing scope for production expansions in line with the growing demand for graphite in batteries.
"Delineation of near-surface, high-grade graphite is expected to defer waste stripping, reduce mining costs, extend mine life and ultimately enhances Chilalo’s project economics,” Hoskins said.
“Previous work at Chilalo has found that high-conductance EM targets correlate with high grades and mineralisation thickness. We are confident that continuing to target high conductance EM targets will continue to deliver exploration success.”
Trenching work
The company is carrying out a trenching program across priority areas to determine surface projections, grade and thickness of the graphite deposits.
Results of the trenching are expected to be available next quarter and will be used to identify targets for a drilling program that is expected to commence in May 2022.
Notwithstanding the upside opportunity associated with exploration success, Chilalo is a robust project with an 18-year mine life and resource growth is not a requirement in order to obtain finance for construction.
Evolution Energy Materials is targeting a final investment decision in the second half of 2022.
Towards net-zero
EV1 is committed to supplying sustainable graphite solutions for the global green economy and in doing so, create the first net-zero carbon graphite mine.
A DFS confirmed the opportunity to produce high-quality flake graphite at Chilalo and the company intends to apply Chilalo flake graphite to downstream processing to produce battery anode material, expandable graphite, micronised graphite and graphite foil.