AMN - TANZANIA: Funding nearly finalised for Epanko

Kibaran Resources says it is poised to finalise project financing for development of its Epanko graphite project in Tanzania after raising $2.0 million via a share placement. The proceeds will be used in part to complete the due diligence process on Epanko.

Epanko has an estimated capital cost of $77.5 million.

The bankable feasibility study on Epanko (proved and probable ore reserve of 10.9 million tonnes @ 8.6% TGC) found the project had an estimated capital cost of $77.5 million with a pre-tax NPV value of $197.4 million and a payback period of just 2.7 years. This is based on initial annual production of 40,000 tonnes of natural flake graphite concentrate, generating annual EBITDA of $33.6 million.

Site works are scheduled to start within three months of securing debt and equity finance with first production forecast to take place nine months from then.

Kibaran has signed a binding long-term offtake agreement with German integrated materials and technology company thyssenKrupp for 20,000 tonnes/year of graphite concentrate and recently announced a Memorandum of Understanding with Sojitz Corp, one of Japan’s largest trading conglomerates. The MoU with Sojitz is aimed at using Epanko graphite in the high-growth lithium battery industry that is expected from the electric vehicles and energy storage markets.

The booming lithium-ion battery market represents an outstanding commercial opportunity for Kibaran given the high quality of the Epanko graphite and the forecast increase in battery sales. Kibaran is well positioned given Panasonic (Japan) and LG Chem (Korea) are developing the world’s largest giga-factories.

Kibaran managing director Andrew Spinks says the sale of graphite to the battery market would provide a strong boost to the project’s already robust economics.

The debt funding proposal for Epanko, which is currently the subject of an advanced due diligence process by lenders, does not take into account any sale of graphite to the battery industry. This means that sales to the battery market could provide a substantial additional revenue stream for Kibaran.

“The battery market is booming and based on the very positive test results obtained so far, we believe our graphite has the qualities to supply this market,” Spinks says. “The testing under way will provide important information to help us pursue also this potentially lucrative aspect of our strategy.”

www.kibaranresources.com

News courtesy of International Mining