The key objective of the stage I development is to establish infrastructure and market position to support development of the much larger stage II expansion project.
The first stage is focused on developing a 20-25,000 tonne per annum graphite mine and processing facility in Tanzania, with planned exports of graphite products to USA, China and other markets.
READ: Volt Resources progresses towards securing graphite offtake agreements for stage I of Bunyu project
Volt non-executive chariman Asimwe Kabunga said it was an exciting period for the company as it worked on transitioning from a developer to a producer.
He said: “The delivery of a robust stage I feasibility study is a key step towards unlocking the considerable underlying value of our world-class Bunyu project.
“Once funding is obtained, the company will proceed with the front end engineering and design for stage I and place orders for long lead time components.
“Concurrent with the stage I development, Volt also plans to commence work on the definitive feasibility study for the stage II expansion.”
The selected mining scenario, based on the outcomes of an open pit optimisation, is for three pits to be developed over seven years with a total of 2.8 million tonnes of mill feed being mined.
The first stage is based on a mining and processing plant annual throughput rate of 400,000 tonnes to produce an average of 23,700 tonnes per annum of graphite products.
This would position Volt as a significant participant in the global flake graphite market.
Financial analysis showed favourable pre-tax net present value of US$18.6 million and internal rate of return of 21% over a payback period of 4.4 years.
Total earnings before interest, tax, depreciation and amortisation would be US$93.6 million over the 7 year stage I project period, coming to an annual average of US$13.1 million.
Volt chief executive officer Trevor Matthews said the completion of stage I feasibility was another important step forward in the company’s plan to become one of the top three global producers of natural flake graphite.
He said: “The company has been implementing a two-stage development strategy following the completion of a large-scale pre-feasibility study in December 2016.
“Concurrent with the PFS completion, Volt announced the largest graphite JORC mineral resource in Tanzania and one of the largest in the world.
Stage I feasibility indicates an average free-on-board operating cost of US$664 per tonne and start-up capital cost estimate of US$31.8 million.
Volt is completing the final binding offtake agreements for most of stage I annual production.
Planned layout of the Bunyu mining and processing facilities
Stage II targeting battery sector and other markets
Stage II will expand on stage I production based on the market demand for Bunyu’s products and leverage the large-scale graphite mineral resource and Bunyu’s proximity to critical infrastructure.
The proposed expansion is targeted to meet expected significant increases in demand for coarse flake graphite in the expandable graphite market and fine flake size products for battery anode material and other industrial uses.
Volt believes that demand for flake graphite from the expandable applications sector will continue to increase ahead of industry forecasts, representing a significant opportunity for the company over the short to medium term.
For the growth sectors of lithium-ion batteries and fire-retardant building materials, it is expected most new supply will be naturally-sourced graphite.