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- EcoGraf (EGR) has announced the Tanzanian Government has signed a landmark settlement with Barrick Gold
- This comes after a nearly three-year deadlock period which paused the development of the Epanko Graphite Project
- Epanko is a natural flake graphite project which has finally checked off all the required milestones
- The project is expected to generate a pre-tax net present value of US$211 million
- Additionally, Epanko will help to transform the local community and provide thousands of jobs
- EcoGraf is up 22.7 per cent after today’s news, with shares trading for 8.1 cents each
EcoGraf (EGR) says the Tanzanian Government has signed a landmark settlement agreement with Barrick Gold.
Having been described by Barrick President Mark Bristow as a “historic day for Africa”, this agreement will unlock the financing and development of EcoGraf’s Epanko Graphite Project.
Epanko is a long-life natural flake graphite project that has now checked off all the necessary milestones. These include a mining licence, bankable feasibility study, due diligence, off-take, EPC and financing.
EcoGraf’s overall mission is to build a vertically integrated business to produce high purity graphite for the lithium-ion battery market.
To complement its operations, the Epanko Graphite Project will supply additional feedstock for the graphite processing facilities and give customers a loyal, high-quality supply of graphite for industrial purposes.
There has been a “deadlock” between Barrick and the Government since March 2017, which resulted in developmental delays for Epanko. Since then, the company has worked with KfW IPEX-Bank to seek a resolution with the Government and secure senior debt financing.
A US$60 million senior debt funding proposal is currently being prepared. Subject to securing the agreement of all parties, completing approvals and loan agreements, the proposal is now expected to be accelerated.
After the signing, Barrick announced a US$50 million budget for 2020.
Economic Impact
Epanko has strong economics and, as well as generating a pre-tax net present value (NPV) of US$211 million for shareholders, will make a long term contribution to Tanzania’s economic, industrial and social development.
It’s expected that Epanko will operate for over 40 years and is forecast to contribute over US$2 billion to Tanzania. Over 95 per cent of the 300 permanent staff will be Tanzanian and thousands of jobs are set to open.
Community Engagement
EcoGraf has ensured community engagement, even during the deadlock period. The company has proudly reported that several social projects have been undertaken with the Epanko and Mahenge communities.
One of these projects include a US$7.5 million Resettlement Action Plan for the Epanko community. The houses have been designed and constructed using cement blocks and roofed with tin sheets. They have a solar panel to provide power and a low energy cooking stove.
The company has led the construction of additional buildings for the local primary school and, in addition, has sponsored 52 students to attend educational programs at the Vocation Education Authority’s Mikumi Centre.
To further support education within the community, materials have been supplied to secondary school students.
Social and Environmental Sustainability
The Epanko Project has been designed to meet strict standards for environmental sustainability and to be fully compliant with IFC Performance Standards and the Equator Principles.
These standards provide assurance for financiers and customers that products from Epanko will be responsibly produced.
EcoGraf is up 22.7 per cent after today’s news, with shares trading for 8.1 cents each at 11:46 am AEDT.
