LONDON (ShareCast) - (ShareCast News) - Natural resource investment company Armadal Capital said on Tuesday that a newly completed scoping study demonstrates "robust and compelling economics" at the Mahenge Graphite project.
The study, carried out at the Tanzanian site by BatteryLimits, yielded a pre-tax IRR of 122% and NPV of US$349m with a low development capex of US$35m, with an after tax payback period of 1.2 years.

This study was completed on a 400,000 tpa throughput, producing an average of 49,000tpa of high quality graphite products during a 32-year mine life.

Nick Johansen, Director of Armadale said: "Crucially, the scoping study was limited to just 25% of the project's current resource, which forms stage 1 of a planned staged development programme. Accordingly, with an upgrade in throughput there is significant potential to improve the project economics even further. Our next steps will now be to commence a definitive feasibility study so that we can advance Mahenge to a decision to mine early in 2019."

According to the study, the deposit is one of the world's highest grade large flake deposits following an upgrade to 51.1 Mt at 9.3% TGC.

Dave Pass, scoping study manager said: "The results of the Scoping Study confirm the combination of high graphite feed grade and coarse flake high purity graphite product, delivering robust project economics and warranting progress to the next phase of feasibility studies. Given the size of the resource it would be expected that there remains significant room for further project optimisation."

With plans to proceed in mining by early 2019, Armadale will now commence in negotiations with strategic funders and off-take partners.

As of 1145 GMT, Armadale Capital's shares were up 5.32% at 2.08p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE