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Magnis restructures Nachu project ops on Tanzanian mining law changes

Magnis Resources Ltd. has restructured its Nachu graphite project on the back of changes to Tanzania's mining legislation in 2017, according to a March 9 news release.

The company has amended its special economic zone license with the Tanzanian government, granted to unit Magnis Technologies Tanzania Ltd. Under the changes, Magnis Technologies will now purchase graphite ore directly from the company's other subsidiary in Tanzania, Uranex Tanzania Ltd.

Uranex, which owns the project's mining license, will operate under Tanzania's regular laws, but Magnis Technologies will operate the company's processing plant at the Nachu project under the special economic zone license. A special economic zone governs the operation of the graphite processing plant and is not subject to changes in the mining legislation in 2017.

Magnis said the new arrangement will allow the company to retain full ownership of Magnis Technologies. There will also be no restrictions on retaining earnings outside of the country.

At a capital expenditure of about US$40 million, Uranex will establish a mining quarry to deliver ore to the processing plant and operate mining pits and waste stockpiles. Meanwhile, Magnis Technologies will own the processing plant and other project assets and will receive an investment of about US$230 million.

Magnis said it will now reevaluate a previous bankable feasibility study with revised pricing and calculate separate capital and operating expenditure costs for Magnis Technologies and Uranex.

The revised special economic zone area is now 206 hectares and will be excised from the original Nachu special mining license.

The company will also start discussions with potential funding partners for the project in the near term. Other companies with graphite operations in the Nachu region have also shown interest in having ore and graphite concentrate treated at the Nachu plant, it said.