Bass Metals (ASX: BSM) has re-joined graphite producer ranks after recommissioning its wholly-owned Graphmada large flake graphite mine in Madagascar following several months of downtime for process plant expansion and refurbishment.
Wet commissioning was successfully completed this week with further fine tuning and test work to continue throughout ramp up to optimise recoveries and efficiencies.
Under stage one, Graphmada will produce 6,000tpa of graphite concentrate, with all 2018 production pre-sold to offtake parties.
“The company is pleased to deliver the first stage of its long-stated strategy of refurbishing and expanding production at Graphmada, with the aim of establishing positive cash flow for the company,” Bass chief executive officer Tim McManus said.
Bass chairman Rick Anthon said the recommissioning would generate revenue to develop further planned operational expansions.
According to Bass, the successful recommissioning is timely and enables the company to take immediate advantage of the strong market conditions of tightening large flake graphite supply and mounting demand.
Additionally, Bass is debt-free and has a secured an offtake agreement with Europe-based Possehl Erzkontor GmbH &Co.
Possehl will purchase 3,000 tonnes per annum of graphite concentrate from Graphmada until 2020.
Mr McManus said now that stage one had been achieved, the company would begin stage two expansion work to produce 20,000tpa of graphite concentrate by the end of next year.
He added the company would also be developing expandable graphite via its planned stage three expansion to target the flame-retardant, foil, radiation shield and electromagnetic pulse markets.
China’s flame-retardant market alone is anticipated to consume up to 2 million tonnes of graphite by 2027.
At this stage, Graphmada has four large flake deposits that have an estimated 382,000t of contained graphite.
The company has also cemented its position in the country with landholder titles, mining and environment permits in place for 40 years.
Prior to the refurbishment, Graphmada produced 1,500tpa of graphite concentrate.
Shares in Bass were up 10% to A$0.033 at the start of today’s trade.