Epanko to cost $88.9m

PERTH (miningweekly.com) – An updated bankable feasibility study (BFS) for the Epanko graphite project, in Tanzania, has showed that the increased production rate of 60 000 t/y would require a capital investment of $88.9-million.

The BFS estimated that the project will have a pre-tax net present value of $211-million and an internal rate of return of 38.9%, delivering yearly earnings before interest, taxes, depreciation and amortisation of $44.5-million.

“This detailed updated BFS shows that Epanko is a world-class graphite project in every respect. The outstanding quality of the deposit underpins the project’s extremely robust economics, demonstrated by the strong alliance the project has managed to secure with a range of German industrial groups,” said Kibaran MD Andrew Spinks.

“Passing this milestone was the key catalyst to advance debt financing and allows Kibaran and its sales partners, industry groups and private equity groups that have previously expressed interest, to commence project financing discussions in detail.”

A debt financing programme has started under the leadership of Germany’s KfW IPEX-Bank, with Kibaran also working through an assessment process with South African bank Nedbank and Australia’s Finance and Insurance Corporation.

Discussions are also progressing with a number of strategic equity investors, with Kibaran to determine the preferred debt and equity funding structure.

Kibaran is also working on completing the feasibility study for the production of battery grade spherical graphite, with the study due to be completed in the third quarter of this year.

The study is based on a staged integration with the ramp-up of graphite production at Epanko.

Downstream processing is expected to provide a floor price for mine gate products, given the access to value added markets through the additional processing facility.

The ASX-listed company previously signed a binding sales and offtake agreement covering some 44 000 t/y of flake graphite concentrate, with a further 16 000 t/y under negotiations with existing partners and leading German carbon groups.