The Caleva UK single-screw Variable Density Extruder (VDE) is a continuous powder processing equipment known for spheronization and extrusion. Its suitability for granulation remains uncertain, a common challenge in powder processing industries that deal with granules, pellets, and tablets. This study investigates the VDE's potential for granulation, using 65 µm CaCO3 powder and PEG 4000 as a liquid binder. In order to replicate several experimental setups with varying binder concentrations and liquid-to-solid ratios (L/S) of 0.1 and 0.15, eight DEM simulations were run. Our results indicate that higher binder concentrations yield more consistent products with fewer fines, while lower concentrations result in inconsistent products with increased fines. Low L/S ratios produce fragile, fine-sized products with a broad particle size distribution (PSD). DEM simulations reveal a direct relationship between liquid binder content and contact forces. Analysis of bonds formed, and particle counts in simulations corroborates experimental observations of fines production. Additionally, granule strength appears to be directly proportional to contact force.