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Evolution Energy sees potential "multi-decade" graphite mine and production expansions

Tue 08 Mar 22, 2:37pm (AEST)
Trucks - Yellow truck drives along a winding path inside an open cast mine in New South Wales, Australia
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Key Points

  • Geophysics result return over 33km of high conductance graphite targets
  • Evolution Energy is targeting a drilling program in May
  • The Chilalo Graphite Project already has robust economics, including an 18-year mine life

Evolution Energy (ASX: EV1) has returned over 33km of “high or ultra-high-conductance” graphite targets from a recent fixed loop electromagnetics program at its Chilalo Graphite project.

The Chilalo Graphite Project is located within the Nachingwea property, a 5,400skm tenement area in south-east Tanzania.

Evolution Energy believes that discovering additional near surface high-grade graphite can enhance the economics of the Chilalo Project by reducing mining costs, extending mine life and providing a scope for production expansions. 

“We are extremely encouraged by these results, demonstrating the scope for significant growth in the Chilalo mineral resource,” Managing Director Phil Hoskins said in a statement. 

“Previous work at Chilalo has found that high-conductance EM targets correlate with high grades and mineralisation thickness. We are confident that continuing to target high conductance EM targets will continue to deliver exploration success.” 

Next steps 

Evolution Energy is currently carrying out trenching activities used to identify targets for a drilling program that is expected to commence in May

The company views ongoing exploration as supplementary activities for the already “robust” Chilalo Project.

A Definitive Feasibility Study was completed for Chilalo back in January 2020 with key outcomes including: 

  • Mine life: 18 years

  • Net present value (post-tax): US$331m

  • Average sales price: US$1,534 a tonne

  • Average costs: US$778 a tonne

In a recent Market Index interview with Managing Director Phil Hoskins, he said that "a number of forecasters, Wood Mackenzie, Benchmark Mineral Intelligence ... forecasting very large increases in graphite [prices]. I think 1,400% over the next 25 years."

Evolution Energy said that ongoing exploration activities are not a requirement to progress the project towards financing.

The company is targeting a final investment decision in the second-half of 2022.

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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