Graphex Mining Updates PFS for Chilalo Project

Graphex Mining (ASX:GPX) has released an updated prefeasibility study (PFS) for its Chilalo graphite project in Southeast Tanzania.

The company is approaching Chilalo with a two-stage production scenario, which would see stage 1 produce about 58,000 tonnes of graphite product each year during the first two years of operation.

Stage 2 would be an expansion beginning in the third year, and would see the asset produce around 104,000 tonnes of graphite product each year for 4.3 years.

Stage 1 is expected to cost US$43.6 million in pre-production capital expenditure, while stage 2 is docketed at US$32.5 million. The latter is anticipated to be funded from free cashflow.

Also part of the updated PFS is a proposal for a high-grade open-pit operation and a plant for comminution and flotation processing. The graphite product would be transported to and shipped from Mtwara Port, approximately 220 kilometers from Chilalo.

The study features two avenues for the company, an ore reserve case based solely on current ore reserves, and an increased life-of-mine (LOM) case that includes inferred resources. While the ore reserve case presents a mine life of 6.3 years, the LOM case could see that boosted to 8.5 years.

Similarly, the ore reserve case’s average annual production is estimated at 91,000 tonnes per annum (tpa) with a plant feed rate of 831,000 tpa, while the LOM case is closer to 93,000 tpa with a plant feed rate of 883,000 tpa.

The ore reserve case posits a post-tax net present value (NPV) of US$237 million at a 10-percent discount, along with a post-tax internal rate of return (IRR) of 130 percent with a post-tax payback period of less than a year.

Graphex Managing Director Phil Hoskins described the updated PFS as “an important milestone” for the company in a statement.

“Following substantial improvements to Chilalo’s product specifications and the continued strength in coarse flake graphite pricing, the economic outcomes of this study are compelling,” he said.

“Completion of the updated PFS represents an important milestone towards an investment decision by potential financiers, who have identified Chilalo as an outstanding project in the graphite sector,” Hoskins continued. “Our efforts remain firmly focused on meeting the due diligence requirements of the financier and continuing to work with the Tanzanian Government to address key legislative and regulatory issues.”

The company’s next steps for Chilalo are to further increase ore reserves and to take necessary procedures to successfully complete a bankable feasibility study (BFS). Graphex is also currently in the process of diamond drilling to further upgrade the project’s inferred resource, the results of which are expected to underpin the BFS.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.