ASX listed flake graphite hopeful Volt Resources has reported that two mining licence applications over the company’s Bunyu graphite project have been recommended for approval by Tanzania’s Ministry of Minerals.
The company lodged the applications earlier this year which strategically cover the footprint for both the planned Stage 1 and Stage 2 developments proposed by Volt at its large graphite project.
The recommendation is a positive forward step in the mining licence approval process for the company as it seeks to become a producer of the sought-after premium flake graphite product in the southern part of Tanzania.
Earlier this year, Volt issued a prospectus to raise USD$40m through a bond issue on Tanzania’s Dar es Salaam Stock Exchange, representing a radical departure from a more typical debt or equity raise, that is commonly implemented at this stage of a resource project.
The bond issue will raise capital to complete the 20,000 - 25,000 tonne per annum Stage 1 development of Bunyu and allow meaningful participation from Tanzanian and Ugandan pension funds, according to Volt.
The company has also been busy advancing offtake agreements for its product stream over the last six months and there has been no shortage of interest.
More than 80% of the Bunyu graphite reports to the Super Jumbo, Jumbo and Large flake categories, according to test work completed by Volt.
The Bunyu graphite project has a JORC compliant mineral resource of 461 million tonnes grading 4.9% total graphitic carbon, from which it has generated an ore reserve of 127 million tonnes grading 4.4% TGC.
In July, Volt released a feasibility study for Stage 1 of Bunyu that showed the operation would churn out an EBITDA of USD$93.6m over a 7 year period and produce nearly 24,000 tonnes of graphite product annually.
Payback on the Stage 1 development is estimated by Volt to be a little over 4 years and CAPEX costs were on the lowish side, in the order of about USD$32m.
The Stage 1 development carries much of the cost for Stage 2, which would see an eventual ramp up to 170,000 tonnes of graphite product annually over a 22 year mine life.
