Highly Experienced Expert Engaged to Lead Next Development Phase

At the start of the new year, Australian company EcoGraf (ASX EGR / WKN A2PW0M) provides an update on their Epanko Graphite Project in Tanzania. As the company reported, the review of the Special Mining License (SML) application for the project progressed this month, with the East African country’s government now finalizing internal approval processes. EcoGraf therefore expects the SML to be granted by the Mining Commission during the course of the quarter.

In 2024, EcoGraf conducted extensive surveys to update the Epanko Action Plan for local communities in the project area. Subsequently, they prepared compensation plans and assessment reports in accordance with IFC Performance Standards and submitted them to the Chief Government Valuer for approval. Among other things, as part of their commitment to villagers who need to travel to the nearby town of Mahenge for medical care, the Australians completed and handed over a so-called Epanko Pharmacy to the community.

Additionally, in collaboration with Tanzania’s Rural and Urban Roads Agency (TARURA), work has been carried out on the access road to the mine to improve site accessibility during the annual rainy season.

Former South32 Manager Appointed as Project Leader for Next Epanko Development Phase

As EcoGraf is confident that the next development phase of Epanko will not be too far off, they have already appointed expert Clayton Hewetson as “General Manager – Project Development”. Mr. Hewetson is a project manager and qualified civil engineer with more than 30 years of experience in project development and execution, project organization, and project offices in Australia, Africa, and Indonesia.

He has worked with various commodities and in a range of leadership positions for the international mining industry and other project companies, and can point to a successful track record in both brownfield and greenfield projects throughout the entire project lifecycle. Mr. Hewetson has successfully developed and executed numerous remote projects in some of the world’s most logistically challenging regions.

Most recently, he served as “National Director – Major Projects, Australia” at South32, an Australian resources company with a market capitalization of nearly AUD 16 billion, responsible for executing a national portfolio of expansion, growth, decarbonization, and major sustainable projects and programs for the company’s assets. The portfolio was valued at AUD 7 billion over a ten-year period. Prior to South32, Mr. Hewetson was also “Manager – Expansion Projects” at Rio Tinto Iron Ore.

Project Financing

EcoGraf had previously commissioned KfW IPEX-Bank to arrange an export credit cover (UFK guarantee) and a senior credit facility (UFK tranche) of up to USD 105 million for Epanko through the UFK (Untied Loan Guarantee) program. Subject to meeting defined due diligence criteria, this program can provide a loan guarantee on behalf of the Federal Republic of Germany with a long-term maturity, which would offer increased financial flexibility for the Epanko project during the ramp-up phase and operation of the first phase.

In the meantime, there has already been a non-binding confirmation from the German government’s Interministerial Committee that Epanko is, in principle, eligible for a UFK guarantee under the UFK program. However, an Independent Expertise on the project and the proposed financing arrangements must now be prepared in order to obtain preliminary approval for a binding cover offer.

EcoGraf has therefore focused in recent months on completing several pre-development programs to support the lenders’ due diligence processes and the commissioning of the independent expert report. These included:

• – Mining planning to optimize the expanded ore reserve estimate;
  – Analysis of additional geotechnical drilling data to confirm designs for the Tailings Storage Facility (TSF), Water Storage Dam (WSD), and process plant;
  – TSF and WSD breach studies and design updates in accordance with the Global Industry Standard on Tailings Management;
  – Updated environmental studies, environmental impact assessments, and management plans in compliance with International Finance Corporation (IFC) Performance Standards, Equator Principles, and World Bank Environmental, Health, and Safety Guidelines;
  – Updated and optimized project construction schedules, cost estimates, and risk management plans; and
  – Project execution planning, preparation for EPCM tenders, and government approvals.