Uranex positive about African graphite mine MELBOURNE-based...

Uranex positive about African graphite mine

MELBOURNE-based graphite player Uranex says it is confident that Tanzanian ground where it was until recently looking for uranium can host a long-life, low-cost graphite mine.

After releasing metallurgical test results yesterday, Uranex is now looking to raise $10 million to $11m to progress studies to bring a 100,000-tonnes-per-year graphite operation into production by the end of 2016.

Uranex said the testing of samples from its Nachu prospect in Tanzania showed its shallow deposit had large flakes that command a premium price.

Graphite is used in rechargeable batteries such as those used in electric cars and motor bikes and is valued for its heat-resistant properties as a kiln or smelter liner.

“These results, along with the large tonnage potential shown by the recent exploration target, show the high probability of a long-life, low-cost operation at Nachu,” chief executive Rod Chittenden said.

The $10m or $11m would be enough to fund a planned scoping study, after which the company would probably jump straight into a feasibility study.

The $80m or so needed to build the fairly simple plant required to produce the 94 per cent concentrate Uranex is targeting will require it to bring in some partners.

Based on apparent early interest from market players, directors say this may not be too hard, even in today’s capital-constrained environment.

Mr Chittenden and the board are promoting the ground as having similar potential to that of Mozambique-focused graphite company Syrah Resources, which has a market value of $500 million, or about 20 times that of Uranex. With the graphite project firming, Uranex is also planning a name change to reflect its change in focus and help sell its story, as well as a move to Sydney.

Shares in Uranex ended unchanged yesterday at 13c.

http://www.theaustralian.com.au/business/mining-energy/uranex-positive-about-african-graphite-mine/story-e6frg9df-1226885675614#