Mining
The PEA technical assessment by DRA indicates that mining will be carried out using a conventional open pit mining method, utilizing trucks and loaders. The mine strip ratio was calculated to show an average value of 1.65 with minimal overburden pre-stripping requirements as the mineralization is exposed at surface. The mine design capacity is to process 1,169,749 tonnes of ore per year at 92% availability, with an average head grade of 8.5% C.
Processing and Recovery
The processing of Molo ore will entail three stage crushing followed by a Primary milling and flotation separation circuit. The resulting flake graphite concentrate will then be thickened, dried, separated into various flake sizes, packaged and stored before shipment. The final residue generated by the flotation process will generate a clean, non-acidic tailing. The concentrate production is estimated to be an average of 84,000 tonnes of graphite concentrate per annum with an average specification of 92% C. Flotation recoveries achieved for the Molo ore were 89%, derived from metallurgical test work conducted by Mintek.
Graphite Pricing Assumptions
Graphite price assumptions were based on the 24 month average of graphite prices as supplied by Industrial Minerals ("IM") which publishes weekly prices according to data supplied by graphite buyers. The chart below illustrates the average prices in US dollars as supplied on the IM website.
----------------------------------------------------------------------------2 Year Industrial Minerals Magazine Graphite Price Ranges (Jan 2011 - Jan 2013)---------------------------------------------------------------------------- Low High Average+80 mesh 94-97% $ 2,138.24 $ 2,629.41 $ 2,383.82-80 +100 mesh 94-97% $ 1,852.45 $ 2,200.98 $ 2,026.72-100 mesh 94-97% $ 1,688.73 $ 2,075.00 $ 1,881.86-200 mesh amorphous 80-85% $ 590.00 $ 779.41 $ 684.71----------------------------------------------------------------------------
The results of flake distribution test work conducted by Mintek and North Carolina State University ("NCSU") is summarized in the table below. The +50 mesh graphite obtained by NCSU was obtained through simple crushing alone, which is unique to the Molo graphite deposit. Due to the unique ability to extract +50 mesh flake through crushing alone, DRA will have additional metallurgical test work conducted to verify these results before including them in an economic analysis. As such, the flake size distribution arrived at by Mintek in the initial stages of the test work is deemed by the Company to be a conservative estimate.
---------------------------------------------------------------------------- Molo Mesh Size-------------------------------------------------------------------------------------------------------------------------------------------------------- Mintek NCSU----------------------------------------------------------------------------Mesh Size Yield C% Yield C%----------------------------------------------------------------------------+50 Not sized 15.1 93-----------------------------------------------------------------------------50 to +80 Not sized 11.8 95.2----------------------------------------------------------------------------+100 33.3 94.9 11.4 92.2-----------------------------------------------------------------------------100 to +200 36.1 93.3-----------------------------------------------------------------------------200 30.6 82.1----------------------------------------------------------------------------
