Volt locks in approvals for Tanzanian graphite

Flake graphite company Volt Resources continues to tick the boxes for the development of its Bunyu graphite project with the receipt of environmental approvals from the Tanzanian Government.

Importantly, this marks the final pre-requisite for the granting of the Bunyu mining licences.

The ASX listed graphite developer expects the licences to be awarded soon after its Environmental Impact Assessment certificate is lodged with the Tanzanian Minerals Commission.

Last month, Volt secured a second binding offtake agreement to sell 9,000 tonnes of graphite per annum from Bunyu to major Chinese graphite processor and distributor, Qingdao Tiangshengda Graphite, for at least five years.

It also signed a cooperation agreement with HAIDA Graphite, one of China’s largest graphite companies with extensive mining, processing and sales experience, that could lead to an offtake agreement.

Bunyu has a mineral resource of 461 million tonnes @ 4.9% total graphitic carbon and a JORC-compliant ore reserve estimated at 127 million tonnes @ 4.4% TGC.

Notably, up to 81.3% of the graphite sits in the highly sought-after Super Jumbo, Jumbo and Large flake categories.

Volt Chairman Asimwe Kabunga said: “Looking ahead we remain firmly focused on advancing the Bunyu Project towards Stage 1 production.”

The company says its Stage 1 project development will produce an average of 23,700 tonnes of graphite product per annum over an initial seven year mine life at the proposed Tanzanian mine.

Pre-tax NPV has been estimated by Volt at around US$18.6m on the back of a 21% IRR and total EBITDA of USD$93.6m with a payback of 4.4 years.

Start up CAPEX costs are estimated at a very respectable USD$31.8m.

Volt expects to produce first ores from Bunyu within 12 months of the capital raising being completed.

The Stage 1 works incorporate a significant amount of infrastructure and a number of utilities that could potentially fast-track a future decision to expand into the significantly larger Stage 2 development.

Stage two could see the mine churn out 170,000 tonnes of graphite product a year over a 22 year mine life.

Volt is looking to raise up to USD$40m that could underwrite the project through the first ever resources-based Note to be listed on the Dar es Salaam Stock Exchange.