ASX-listed Volt Resources has passed another milestone on its way to developing the Bunyu Graphite Project in Tanzania, which promises to sit amongst the elite when it comes to globally significant graphite plays.
Volt has made a flying start to 2018, this week submitting a mining licence application covering 18 square kms for stages 1 and 2 with the Minister for Minerals in Tanzania who has already expressed her support for the project.
The mining license applications are the final key approvals needed for the project and follow last month’s submission of Environmental and Social Impact Statements.
The Perth-based company is one of the most advanced graphite plays on the ASX, having already completed a PFS at Bunyu with some seriously impressive numbers.
The study concluded that a mine producing 170,000 tonnes of graphite concentrate per annum over an initial 22 year mine life would have a pre-tax NPV of US$1.31 billion and generate a stunning internal rate of return of 87%.
The project is expected to payback its relatively tame US$173 million capital cost in just 1.4 years.
Volt is proposing a two-stage development, with Stage 1 delivering 20,000 tonnes per annum at a development cost of about US$30 million, ramping up in Stage 2 to 170,000 tonnes per annum, which is targeted for completion by late 2020. A development decision on stage 1 is expected in the June quarter.
Those numbers would place Bunyu amongst the biggest and best graphite mines around the world today. However, even at Stage 2 production levels, the company would still only be scratching the surface of the total mineral resource at Bunyu, which stands at 461Mt grading 4.9% total graphitic carbon.
Volt’s Bunyu project is surprisingly well advanced with binding offtake agreements already signed with five strategic partners for 36,000 tonnes per annum.
Volt is chaired by Tanzanian-born Australian entrepreneur Asimwe Kabunga, who was instrumental in establishing the Tanzania Community of WA Inc and served as its first president. The management team is led by CEO, Trevor Matthews, who is well known as a former WMC executive and MD of MZI Resources and Murchison Metals.
Volt’s approach to doing business in Tanzania has extended to an innovative funding deal for Stage 1 of the project. The company is planning a US$40 million bond issue to be listed on the Dar es Salaam Stock Exchange in Tanzania. This followed strong interest from investors in Tanzania, Uganda and Kenya, including local pension funds.
CEO Trevor Matthews said: “We are continuing to make significant strides towards the planned Stage 1 development of our Bunyu Graphite Project this year, with the submission of the Mining Licence Applications another key component of this strategy.
“Coupled with the recent submission of the ESIS and the partnering with Exotix on the project funding for Bunyu, our focus remains squarely on our shareholder value proposition with the near-term development of what will be a globally significant graphite asset.”
By Matt Birney
