Tag Archives: Tanzania

Black Rock Mining recruits China Railway Seventh for Mahenge graphite build

Energy minerals, Mineral project development, Mining services, , , , , , , , ,

Black Rock Mining says it has signed an agreement with China Railway Seventh Group Co Ltd (CRSG) that could see the major Chinese infrastructure contractor help build the Mahenge graphite project in Tanzania.

The project is envisaged as a graphite development that would gradually ramp up to its ultimate 340,000 t/y capacity through the addition of four production modules. In order to reach the start-up module one rate of 85,000 t/y, the company forecasted an initial capital requirement of $116 million. First production is targeted in 2020 or 2021 depending on financing.

This is not Black Rock’s first Chinese agreement for Mahenge. In September 2018, it signed a strategic cooperation agreement with Yantai Jinyuan Mining Machinery Ltd, part of the larger Yantai Jinyuan Group, that committed both parties to work together with a view to Yantai supplying process plant machinery and related infrastructure for Mahenge.

Black Rock says CRSG is part of a large contractor group with significant operations and experience in Africa. CRSG’s parent company, China Railway Group, is a state-owned enterprise and among the largest construction businesses globally.

The non-binding cooperation framework agreement (CFA) outlines the key terms under which Black Rock and CSRG plan to progress to execution of a binding engineering, procurement and construction (EPC) contract for the module one process plant and non-process infrastructure at Mahenge. It provides for a coordinated EPC approach between CRSG and Yantai, Black Rock’s existing strategic build partner.

It also provides for the development of a conventional EPC arrangement containing customary performance warranties and typical risk allocation structures (guarantees, bonding) required by project financiers, Black Rock said.

Key agreed terms include a staged approach to the development of a final EPC contact price and a deferred, performance-based payment structure. This deferred payment structure results in over 30% of the total EPC contract value being payable only after completion of final plant performance tests to requisite levels, it said.

Black Rock Managing Director and CEO, John de Vries, said: “This framework agreement is a big step forward for Black Rock and our Mahenge graphite project. To have Black Rock aligned with a project execution partner as large, established, Africa-proven and financially robust as China Railway Seventh is materially significant. Our discussions have been highly collaborative to this point, as reflected directly in the specific framework agreement terms.

“In short, the agreement delivers us greater certainty on our project execution. It has been deliberately structured to deliver a final EPC contract that maximises both partner alignment and appeal to potential project financiers.”

According to de Vries, CRSG and Yantai have also agreed to provide assistance in relation to Mahenge project financing, including any related financing based on Chinese content.

He concluded: “We now look forward to advancing rapidly with CRSG and Yantai towards a final EPC contract for development of the world-class Mahenge graphite project.”

Black Rock and CRSG/Yantai are now targeting the execution of a binding term sheet by March 31, 2020.

MCC to deliver graphite processing plant for Magnis’ Nachu project

Comminution of minerals, Energy minerals, Mineral processing, Mineral project development, Mining equipment, Mining services, , , , , , , ,

Metallurgical Corporation of China (MCC) is to deliver a turnkey solution for a 240,000 t/y graphite production facility at Magnis Energy Technologies’ Nachu project, in Tanzania, following the signing of a binding engineering, procurement and construction (EPC) contract between the two companies.

The $277 million contract will also allow Magnis to access project funding support from the China Export Credit Agency, the ASX-listed company said, adding that initial meetings between all parties had indicated financing of no less than 80% in debt or delayed payments could be achieved in the first half of the year.

Nachu reserves, according to a 2016 study, total 76 Mt at 4.8% Cg for 3.6 Mt of contained graphite, with this tonnage providing sufficient material for an initial operating life of around 15 years.

This comprises close to 11.7 years at 240,000 t/y nameplate concentrate output after which lower-grade ore stockpiles are processed for another three-and-a-half years at an average concentrate output rate of 160,000 t/y.

Magnis said the contact provides a turnkey solution to produce high-purity graphite products and is inclusive of all items and inventory, including but not limited to the processing plant, infrastructure including roads, power, worker camps and storage facilities.

Vice President of MCC International, Wang Zhou, said: “The Nachu project is very unique and is one of the most impressive graphite projects I have seen to date. In particular, our team has been very impressed with the high purity products it can produce, minus any purification.”

Magnis Managing Director, Marc Vogts, meanwhile, called Nachu Tanzania’s most advanced graphite project.

“With the ability to produce 99.95% graphite products via mechanical processes only, Magnis is in a unique position to become a leader in the production of anode materials for the rapidly growing battery market,” he said.

Ilunga UG mine adds to Shanta’s high-grade gold production options

Mine operation news, Mineral project development, Precious metals, , , , ,

Shanta Gold says it has brought its Ilunga underground mine at the New Luika Gold Mine (NLGM), in south-western Tanzania, into commercial production on schedule and on budget.

The first ore stope is now in production at a depth of 98 m below the portal and 130 m below surface, while the primary ventilation fan and underground infrastructure are installed and operational, the company said.

Commercial output comes following gross pre-production capital investment of only $7.9 million ($5 million after netting off pre-production revenue) and less than 12 months after the underground portal blast at Ilunga was carried out, Shanta said.

Ilunga is now the third source of high-grade underground feed from NLGM alongside Bauhinia Creek and Luika mines. The underground mine has a probable ore reserve of 660,500 t at 5.56 g/t for 118,000 oz contained, as well as inferred resources of 636,647 t at 3.57 g/t for 73,067 oz.

Shanta has previously said it views Ilunga as a high-grade production option in Tanzania, with the potential to contribute up to 25,000 t/month of ore and an average 20,000 oz per planned level of development.

The company previously moved development forward 12 months after the project showed off a “compelling business case”. This included a very low capital intensity of $75/oz (pre-production) and a pre-tax internal rate of return of 129% at a gold price of $1,200/oz.

Underground drilling targeting the conversion of the inferred ounces into the mine plan and extending the mine life at Ilunga is expected to take place in the first half of 2020.

Eric Zurrin, Chief Executive of Shanta Gold, said: “Bringing these high-grade ounces online within budget and on time is yet another example of our model at work, namely: adding low cost ounces to resources at our well established operations, thereby increasing the mine life and the free cash flow generation potential at NLGM.”

Cullinan shines in Petra Diamonds’ first half results

Gem stone mining, Mine operation news, Mineral processing, Mining equipment, Mining maintenance, , , , , , , ,

The Cullinan diamond mine, in South Africa, led the way in Petra Diamonds’ first half fiscal year 2019 results, with run of mine (ROM) from the underground block cave up 30% year-on-year to 785,444 ct.

Petra’s overall group production rose 10% year-on-year to 2.02 Mct (1.84 Mct in H1 2018), while ROM output rose 13% to 1.9 Mct.

Cullinan’s ROM diamond production increased 30% to 785,444 ct, due to a 12% increase in ROM treated to almost 2 Mt, as well as a 16% increase in the ROM grade to 39.3 ct/ht. This increase in volume and grade was due to the continued ramp up of production from the C-Cut phase 1 and a reduction in ore mined from old areas with higher waste dilution, the company said.

During the period, production from the C-Cut phase 1 was largely concentrated in the south-western part of the footprint and, therefore, not representative of expected production associated with the full extent of the C-Cut phase 1 block cave, Petra said.

The third and final underground crusher was commissioned during December, delivering increased operational flexibility as mining progresses across the footprint of the cave, the company added. The new Cullinan plant is fully operational and meeting design parameters while normal optimisation is ongoing.

“Overall, Cullinan production increased by 37% to 832,026 ct (H1 FY 2018: 607,235 ct) with increased ROM production supplemented by the ramp-up of tailings production,” the company said.

The C-Cut phase 1 project is planned to contribute around 3 Mt this year, with a further 700,000 t to 1 Mt sourced predominantly from the CC1E mining area, as well as from other B Block tonnes. Steady state production of 4 Mt/y will be delivered from C-Cut phase 1 and CC1E from FY 2020 onwards, according to the company. At the same time as this, the ROM grade at Cullinan is expected to remain in the 38-42 ct/ht range from FY 2019 onwards. The company’s current mine plan has a life to 2030, but the major residual resources at the mine indicate that the actual LOM could extend beyond 2030.

Meanwhile, at the company’s Finsch mine (South Africa), ROM carat production was flat at 927,934 ct in the company’s first half. A planned winder upgrade was successfully completed during the period, which necessitated a planned shutdown from December 21 to January 4. Overall, Finsch production decreased by 9% to 947,424 ct due to the planned reduction in tailings production.

Koffiefontein’s (South Africa) ROM production in the half remained flat at 25,275 ct as the company was negatively impacted during the period from community unrest relating to municipal service delivery, operational challenges experienced relating to plant availability and a lower than planned grade recovered. Since the start of January, additional crushing capacity has been introduced to the plant, employee attendance has normalised and monthly production is expected to ramp up.

Williamson’s (Tanzania) diamond production increased 23% to 214,421 ct, mainly due to an 18% increase in the ROM grade recovered as well as a 4% increase in tonnes treated to 2.7 Mt. Petra said it remained in discussions with the Government of Tanzania and local advisers in relation to the overdue VAT receivables and a blocked diamond parcel.

Capital Drilling wins one-year extension at AngloGold’s Geita mine

Mine operation news, Mineral exploration, Mining equipment, Mining services, Precious metals, , , , ,

Capital Drilling will continue underground exploration and underground grade control drilling services at AngloGold Ashanti’s Geita gold mine in Tanzania after the two companies agreed a one-year contract extension.

The contract extension will commence in January and use the existing underground drill rig fleet, currently located on site.

The underground drilling services represent a sub contract of the comprehensive drilling services contract with Geita, which encompasses blasthole, grade control, delineation, exploration and underground drilling. The master contract is a five-year contract running to December 2020, with Capital Drilling having commenced drilling operations at the Geita gold mine in 2006.

Jamie Boyton, Executive Chairman of Capital Drilling, said: “The experience Capital Drilling has gained at the Geita gold mine over the past 13 years underpins our strategy of targeting Tier 1 long-life assets with quality operators. We continue to deliver excellent operational results for AngloGold Ashanti and are pleased to have the extension of the underground drilling contract for a further year.”

Geita, a multiple open-pit and undergoing operation 120 km from Mwanza, produced 539,000 oz of gold at an all-in sustaining cost of $941/oz in 2017.

Capital Drilling provides specialised drilling services to mineral exploration and mining companies in emerging and developing markets, for exploration, development and production stage projects. The company currently owns and operates a fleet of 91 drilling rigs with established operations in Botswana, Côte d’Ivoire, Egypt, Ghana, Kenya, Mali, Mauritania and Tanzania.

Shanta Gold speeds ahead at Ilunga underground development in Tanzania

Mine operation news, Mineral project development, Precious metals, , ,

Shanta Gold has carried out the portal blast for its Ilunga underground development in Tanzania, three months ahead of schedule.

The company now expects to produce first ore from the project in mid-2019, becoming the third active source of gold in its New Luika operations.

Shanta views Ilunga as a high-grade production option in Tanzania, with the potential to contribute up to 25,000 t/month of ore and an average 20,000 oz per planned level of development.

The company previously moved development forward 12 months after the project showed off a “compelling business case”, Shanta said. This included a very low capital intensity of $75/oz (pre-production) and a pre-tax internal rate of return of 129% at a gold price of $1,200 /oz.

Shanta currently has reserves of 660,500 tonnes at 5.56 g/t for 118,000 oz at Ilunga underground, which is just 3.5 km from the existing processing plant at New Luika.

In addition to providing a new production base, the development of an underground mine at Ilunga will give the company infrastructure to drill off some exploration targets.

This exploration drilling, which also includes underground work at the Bauhnia Creek deposit (part of New Luika), will see the company target, at least, the replacement of reserves on an ongoing basis.

The company’s flagship New Luika gold mine started production in 2012 and produced 79,585 oz in 2017 and 38,200 oz in the first half of 2018. Shanta currently plans to produce 82,000−88,000 oz at New Luika at an all-in sustaining cost of $680-730/oz.