Kibaran Resources commences Epanko Feasibility Study

Kibaran Resources starts Epanko Feasibility Study

Kibaran Resources (ASX:KNL ) has started the Feasibility Study for its Epanko graphite deposit in Tanzania with a team of high calibre, in-country consultants supporting study manager GR Engineering Services (ASX:GNG).

Epanko hosts an Inferred and Indicated Resource of 22.7 million tonnes at 9.8% total graphitic content for 2.223 million tonnes of contained graphite.

This covers just 20% of the project area, and metallurgy has found Epanko graphite to be large flake and expandable in nature.

The study will be based on a 15 year mine life with an initial target production rate of 40,000 tonnes per annum of high quality, large flake graphite.

In September, Kibaran submitted the Environmental & Social Impact Study and completed test work drilling.

Outcomes from the study include:

- Conversion of current JORC Resources to the Reserves category;

- Mine design, pit optimisation and production scheduling;

- Process plant design and associated infrastructure studies;

- Updated capital and operating cost estimates to an accuracy level of +/- 10% to 15% on capital and +/-10% on operating costs;

- Conclusion of additional marketing and concentrate off-take agreements;

- Financial analysis and modelling;

- Evaluation of mine and plant expansion capabilities to increase tonnage throughput; and

- Completion of a bankable feasibility document.

This is targeted for completion in the June Quarter 2015.

Other key target completion dates are March Quarter 2015 for the Mining Licence application, detailed engineering in the June Quarter 2015 and financing in mid-2015.

Kibaran Executive Director Andrew Spinks said: The diversity in backgrounds of our board members will be a real asset in guiding the company through the feasibility process.

All directors have lived and worked for extended periods of time in Tanzania so we understand the working environment and have empathy with the country and its development.

Our boards experience collectively spans from exploration, feasibility and permitting, to financing, development, construction, commissioning and operations so Kibaran is well positioned to expedite the Epanko development.

Feasibility Study Team

All consultants involved with the study have expertise and experience in the resources sector in Tanzania.

They have also signed a binding, exclusive agreement for services to Kibaran in terms of graphite projects within Tanzania.

GR Engineering, which has aligned itself with the success of Epanko by accepting part payment of services for the Feasibility Study in Kibaran shares, will provide study management, engineering and procurement activities to produce estimates of all related project capital and operating costs.

Knight Piesold will carry out engineering work on hydrology, Tailings Storage Facility design, water management, access road design and site geomechanics while Independent Metallurgical Operations Pty Ltd will provide independent metallurgical testwork and flowsheet review.

CSA Global Pty Ltd will carry out geological and resource estimations; George Orr and Associates will determine mine design and waste dump geotechnical parameters; and Intermine Engineering Consultants will provide Ore Reserve estimation, waste dump design and mine scheduling

Environmental Permit and ongoing environmental matters will be carried out by MTL Consulting while Trinity Promotions will be responsible for community relations with all key stakeholders and monitoring corporate social investment projects.

Kibaran executive director Grant Pierce commented that all companies involved in the Feasibility Study have a proven track record in their field of expertise and sound experience working within Tanzania.

Epanko Graphite Deposit

The Epanko graphite deposit is located in the wholly-owned Mahenge Graphite Project.

It hosts an Inferred and Indicated Resource of 22.7 million tonnes at 9.8% total graphitic content for 2.223 million tonnes of contained graphite.

This covers just 20% of the project area, and metallurgy has found Epanko graphite to be large flake and expandable in nature.

GR Engineering, which has aligned itself with the success of Epanko by accepting part payment of services for the Feasibility Study in Kibaran shares, will undertake the feasibility and project evaluation study.

The scope of work will include study management, engineering and procurement activities to produce estimates of all related project capital and operating costs to enable the economic viability of the project to be assessed.

Kibaran and GRES are working together to appoint appropriate consultants in the specialised areas of tailing storage facility design, geotechnical investigation, surface water management, power supply and water supply.

This follows on the release of the Scoping Study in August that had given the company sufficient confidence and a business case to advance the project to a feasibility study.

Key takeaways from the Scoping Study include a Capex of $56 million, an operating cost per tonne of concentrate of $489, compared to the basket price of $1,258/t of concentrate; Net Present Value estimated at $213 million; capital payback period of just 2.5 years; and a substantial mine life of 27 years.

The project boasts a low strip ratio, with the first 15 years at 1.3 to 1, and life of mine at 2.2 to 1.

The start of the Feasibility Study highlights the progress that Kibaran Resources has made with the Epanko graphite deposit.

That study manager GR Engineering has accepted part payment for its services in Kibaran shares is a clear sign of its confidence in the project.

With a high-calibre team of consultants and the boards experience, there is every reason to believe that the companys will expedite development of Epanko.

Share price kickers ahead include:

- Results of testwork drilling;

- Securing the Environmental Certificate;

- Completion of the Mining Licence Application for Epanko — March Quarter 2015;

- Securing second offtake agreement;

- Results from Feasibility Study — June Quarter 2015;

- Detailed engineering — June Quarter 2015; and

- Financing in mid-2015.

Sign up to Proactive Investors