Evolution Energy Minerals Ltd (ASX:EV1) has tapped CPC Engineering to complete front-end engineering and design (FEED) work for a processing plant at the Chilalo Graphite Project in Tanzania.
CPC is known for its design services and is an old hand when it comes to graphite processing and plant commissioning, making the company a natural choice for EV1’s FEED contract.
Work to optimise the project’s definitive feasibility study (DFS) and FEED design should conclude by September this year.
From here, Evolution can update its capital cost estimates, which are crucial to wrap up the Chilalo project’s financing arrangements.
CPC’s appointment comes soon after Evolution inked its principal offtake agreement and kicked off negotiations with potential financiers — all while the company targets a final investment decision for Chilalo later this year.
Working to bring Chilalo into production
Evolution Energy executive director Michael Bourguignon said starting the FEED study was a “significant milestone” towards realising the Chilalo Graphite Project.
“We are pleased to be partnering with CPC, a firm I have previously executed projects with,” Bourguignon explained.
“I worked closely with CPC in the development of Syrah’s Balama Graphite Project and believe that, combined with my own experiences, its considerable insight and learnings will be invaluable to the development of our Chilalo Project.
“We remain firmly focused on bringing Chilalo into production.
“With a binding offtake agreement for our high-value coarse flake graphite in place and continued engagement with potential financiers, we continue to target a final investment decision towards the end of this year.
“The appointment of CPC and commencement of the FEED is central to delivering on that objective.”
Historically, CPC has completed a large number of bankable feasibility studies, establishing an industry track record centred on executing project design and construction developments on time and within budget.
Optimising the DFS
Evolution’s DFS remains unchanged from the model released in 2020’s first quarter.
However, moving ahead with FEED work, the company will incorporate some DFS optimisations to enhance project economics and reduce Chilalo’s carbon footprint.
For example, the company recently closed the books on a test-work program that supports a proposal to remove Chilalo’s tailings storage facility (TSF) and the dry stacking of tailings within the waste rock dump.
Instead, Evolution will consider using a water storage dam— a much smaller (and therefore less capital intensive) option.
This option could be even safer too — historically speaking, tailings dams represent an environmental risk that have taken on greater significance in the wake of high-profile tailings dam failures in Brazil.
Overall, removing the TSF will reduce Chilalo’s upfront capital expenditure, as well as curb ongoing sustaining costs.
Of course, these savings will be partially offset by the capital required to build a small water storage dam, as well as secure thickening, filtration and centrifuging equipment.
New appointment to bolster FEED work
Evolution has also appointed John Clement as its owner’s representative in connection with the FEED work.
Clement brings more than 30 years of practical experience in the mining and construction industry to the role.
In the past, he’s held leadership roles in engineering, procurement and construction management in major projects, including minerals projects in Africa.
Ultimately, Evolution believes Clement’s appointment strengthens the company’s project execution capability, led by executive director Bourguignon.
In the past, Michael Bourguignon was the project manager for Syrah Resources’ Balama Graphite Project construction in Mozambique.
Beyond Balama, Bourguignon has delivered several other projects in Africa, including for mining giants Perseus and Glencore PLC (LSE:GLEN).
Bourguignon is also supported by Vickey Puncheon, the company’s Tanzania-based general manager of corporate services.
Previously, Puncheon worked alongside Michael Bourguignon and Marc Smith — the company’s site-based manager — to bring the Balama project to life.
Thanks to the shared expertise of its core team, Evolution is confident it can continue advancing Chilalo into the next chapter of its journey.