With action at the Nachu graphite Project in Tanzania heating up, site visits completed and offtake discussions well advanced, I thought it was a time to revisit the fundamentals of the project & the 2016 Bankable Feasibility Study.
Its Important to note the following key items are already in place at Nachu in Tanzania:
- Magnis owns 100% of the project
- All Environmental Approvals and Permits have been obtained
- An MDA Or Special Economic Zone is already inplace between Magnis and the Tanzanian Government
- The Graphite concentrate is in a league of its own, with a large majority being of high value Super Jumbo (+500 microns) and Jumbo flake (+300 microns), with mesh sizing -100 (and closer to 50).
The Project Financials for the Mining Project operating at 240ktpa are quiet impressive indeed:
An NPV10 After Tax: US$1.68 Billion
IRR Post Tax: 98%
Payback Period: 1.2 years
What makes Nachu Stands out in comparison to other projects capable of producing graphite concentrate is the Average TGC Purity of 98% and Jumbo Flake Sizing. Trying to ascertain current pricing for this product on either Fastmarkets or Benchmark Minerals is impossible, because their isn't a company producing today with the capabilities of Magnis's Nachu Deposit. Typical Pricing for Flake Graphite ranges in the 93-95% TGC range.
The Geology is also very advantageous, with outcroping occurring at or near surface resulting in a low LOM strip ratio of 1.5 to 1.
From listening to Frank and reviewing the recent updates it is clear the company is keen to get the project started ASAP following Offtake Discussions and may initially start at a 120kpta operation (Which is 50% less than the DFS, but by no means a small project), before ramping up to nameplate capacity of 240ktpa.
Since the BFS in 2016, the company has proven that a purity of 99.98% spherical graphite material suitable as a graphite anode product can be achieved with NO acid treatment such as Hydrofluoric or Hydrochloric acid, which is a major benefit for the company.
Nachu has the Geology and Potential to be a world class graphite project in its own right, I can't wait to see which North American or Asian Partners are looking to come onboard and get this project into Producting in the next 18-24 months.
(20min delay)