Kibaran Resources Looks Well Leveraged For A Significant Re-Rating As The Epanko Feasibility Study Nears Completion

By Alastair Ford

There’s a new mining minister in Tanzania, after the previous incumbent left amid allegations of impropriety in a multi-million dollar energy scandal that’s already claimed the scalps of several other government ministers.

But in spite of that, Grant Pierce, Executive Director, Projects at Kibaran Resources, doesn’t expect any major disruption at the ministry.

“A new minister’s been appointed”, he says. And the new incumbent George Simbachawene, is already on post and getting down to work.

“I don’t see that having a new minister will cause any delays”, says Grant, “because he was previously a deputy minister some years ago. And people whose opinions I value say he’s a pretty solid guy.”

So, until anyone says otherwise, it’s business as usual for Kibaran, which is pressing forwards with plans to develop two major graphite resources in Tanzania, one at Epanko, in the south central part of the country, and one at Merelani in the north near Arusha.

Epanko is by some margin the more advanced. “Foremost of my agenda is permitting”, says Grant. “The feasibility study should be complete in May. We’re well into the metallurgical testwork now. The next phase is the engineering. Currently I’m putting together a mining license application.”

The company has recently revealed to the market plans potentially to increase output to 100,000 tonnes per year once the mine is up and running. But Grant cautions that this latest proposed expansion is more about ensure that the capacity is in place to meet demand, should that demand growth arise.

After all, it might very well. There are plenty of graphite bulls out there, talking up the growth its use in batteries, the potential for growth in its use in 3-D printing, and the eventual explosion that’s likely to come from the widespread adoption of graphene.

Epanko

Whether that happens overnight is another question, though. “The 100,000 tonnes production rate will be very dependent on increases in demand”, says Grant. “We’re doing the feasibility study at 40,000 tonnes per annum. But in the background we need to know that if demand increases our pits can support it. Our processing plant can – you just upgrade it – we did that exercise already. But we’re taking a conservative approach and I think a smart approach. We’ve designed the plant in such a way that it can be upgraded.”

The investigation of the expansion potential was done by Intermine Engineering Consultants and enhances considerably the value of the asset that Kibaran is now sitting on.

“It’s very exciting”, says Grant. “I think Kibaran offers the complete package. In terms of the graphite, that is of premium quality. It’s high grade. We’ve got a binding take-or-pay off-take agreement. We’ve got a pretty clear timetable to production.”

And it’s all been achieved for a relatively modest outlay. “Over the last 18 months our expenditures have been A$4.4 million”, says Grant. “That’s one of the lowest of the ASX graphite companies. And we’ve got a very modest market capitalisation by comparison.”

All of which means, says Grant, that Kibaran commands significant attention. “We’re well leveraged for a significant re-rating at some point in time”, he concludes. “It’s pretty compelling.”