High-grade graphite discovery offers production and cost reduction for ASX graphite play

Mon 01 May 23, 10:33am (AEST)
Drilling - Building activity on contruction site. Close-up view of drilling machine.
Source: iStock

Key Points

  • High-grade graphite mineralisation discovered in 44-hole drilling program at Evolution Energy's Chilalo Project
  • 1.6km of high-grade mineralisation confirmed out of a potential 3.5km strike length
  • Results demonstrate potential for production expansion, mine life extension, and cost reduction

The results from a 44-hole reverse circulation drilling program at Evolution Energy Minerals’ (ASX: EV1) Chilalo Project confirms the discovery of high-grade graphite mineralisation towards the east of the tenement.

The Chilalo Graphite Project is located in south-east Tanzania, with a recently updated Definitive Feasibility Study (DFS) outlining it as a high margin, low capex and development-ready graphite project. Some of the key stats for the project include:

  • Mine life: 17 years

  • Mineral resource: 20.0Mt at grades of 9.9%

  • Average graphite concentrate production: 52,000 tonnes per annum

  • Post-tax NPV: US$338 million

  • Capital cost: US$120 million 

Breaking down the new discovery

The drilling program confirmed over 1.6km of high-grade graphite mineralisation out of a potential 3.5km strike length. Some of the significant intercepts include:

  • 26m at 9.0% TGC from 8m

  • 8m at 13.7% TGC from 50m

  • 6m at 10.3% TGC from 66m 

  • 10m at 10.2% TGC from 80m 

  • 8m at 9.70% TGC from 90m 

Total Graphitic Carbon (TGC) is the industry-standard unit of measurement for graphite mineralisation. Generally, TGC grades of above 4% are considered good and anything above 8% is considered high-grade. 

“The shallow depth, width, grade and close proximity to the existing Chilalo mineral resource make this an exciting discovery for Evolution,” said Managing Director Phil Hoskins.

“These results clearly demonstrate the scope to materially grow the Chilalo mineral resource and thereby potentially enable a production expansion, extension to mine life and reduction in mining costs.”

Next steps

“Downhole electromagnetic surveys and follow-up drilling will be required as it is likely that there are additional graphite layers that were not intersected by recent drilling,” said Evolution, which will assist with additional drill programs and resource modelling.

Outside of exploration activities, the company has engaged Auramet – A global metals and mining advisory company – to advise on project financing. Evolution believes the optimal financing solution would comprise of non-dilutive Government funding and offtake finance.

The Chilalo Project currently has one offtake partner – China’s Yichang Xincheng Graphite Co – for an initial 3-year term which represents 56% of the project’s planned production or 30,000 tonnes per annum.

DISCLAIMER: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Evolution Energy Minerals was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.


Written By

Kerry Sun

Content Strategist

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.

Get the latest news and insights direct to your inbox

Subscribe free