The Nachu Graphite Project located in South East Tanzania is 100% owned by Magnis Resources Limited.
The unique crystal structure and low impurities in the Nachu graphite mineralisation allow production of a premium product concentrate purity levels up to 99.6% TGC. This is firmly targeted at the rapidly growing lithium-ion battery sector.
On 31 March 2016, Magnis released the results of the Bankable Feasibility Study (BFS) for the NGP. The BFS highlights the exceptional economic returns and low technical risk of Nachu. These characteristics are driven strongly by the high quality size, purity and crystal structure of the contained graphite flake in the Nachu deposit.
Sedgman assumed the lead role in the feasibility study which was prepared with input from a wide range of independent local and overseas technical experts including Orelogy, Digby Wells, Logiman, AMC, Knight Piesold, MTL consultants, AMML Laboratories and Pells Sullivan Meynink. The feasibility study was completed to “Bankable” standards with an accuracy of +/- 10%. Environmental studies were done to “IFC” Standards.
The BFS highlights the outstanding projected financial returns from NGP and demonstrates its low level of technical risk. The BFS delivers a post-tax NPV10% of US$1.69b and an internal rate of return (IRR) of 98%. Capital payback is projected within 14 months of first production.
Pre-production capital for Nachu is estimated at US$269 million (including an 11% contingency). Operating costs over the first five years of production are forecast to be US$502 per product tonne free on board (FOB) from the port of Mtwara (ex royalties), and the life-of-mine forecast is US$559/t.
All necessary infrastructure has been identified, and any required construction incorporated in the BFS planning, including roads, water and grid power sourcing.
On 1 February 2016, Magnis declared an updated Mineral Resource Estimate for the Nachu Graphite Project. The global Mineral Resource Estimate comprises 174 Million Tonnes (Mt) at an estimated grade of 5.4% Graphitic Carbon (Cg) and is reported in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012). The Nachu Project represents one of the largest Mineral Resources of large flake graphite in the world. The Block F Mineral Resource (59.5 Mt in the Measured and 39.3 Mt in the Indicated Resource category) is the primary orebody assessed in the BFS for initial production.
The Ore Reserve estimated by Orelogy is inclusive of the F and FS Blocks solely. The total Proved and Probable Ore Reserve comprises 76 Mt at 4.8% Cg for 3.6 million tonnes of contained graphite (Table 2).
This Ore Reserve provides sufficient material for an initial operating life of approximately 15 years. This comprises approximately 11.7 years at 240,000 tpa nameplate concentrate output after which lower grade ore stockpiles are processed for another 3.5 years at an average concentrate output rate of 160,000 tpa.
There is strong potential for extension of operating life at or near nameplate capacity (240,000 tpa) with further conversion of high grade Mineral Resources into future mine planning scenarios.
Magnis has jointly undertaken qualification of its graphite product offering with a number of prospective end users and supply chain partners. The stated objectives of Magnis’ qualification work were to demonstrate the ability to commercially produce a high performance anode graphite which meets or exceeds end user specifications. Important aspects of the qualification included:
Magnis has produced a 99.99% purity coated spherical graphite anode product from Nachu graphite using existing commercial scale technology and facilities in North America. The production of this anode product did not require any chemical purification phase with acid treatment (HCl/HF). The anode product also delivered outstanding battery cell test results, with favourable performance across key criteria relative to leading Chinese natural and synthetic graphite anodes.
The ability to achieve this outcome is driven by the particular crystalline structure and low in-situ impurities within the Nachu mineralisation.
By alleviating the need for intensive chemical or thermal purification to be undertaken in China (where the overwhelming majority of such graphite processing occurs), Magnis has presented the viability of an alternative supply chain to that which currently exists. It also delivers the clear potential for Magnis to be amongst the lowest cost anode producers with one of the smallest environmental footprints globally. The use of existing technology and commercial facilities is also highly significant in that it delivers replicable results that could be scaled up quickly at low cost in North America and other geographic regions in close proximity to a range of different end users.
The most recent lithium-ion battery tests on Nachu anode product (>99.95% coated spherical graphite) delivered the following results:
These results see the Nachu anode product compare favourably with the leading Chinese natural and synthetic graphite anode products.
The results demonstrate the ability of Magnis to produce battery grade anode material from Nachu graphite feedstock, without the use of chemicals and toxic acids and utilising solely existing commercial scale technology. This important milestone illustrates the viability of a greener and lower cost supply chain for graphite anodes in lithium-ion batteries.