PERTH (miningweekly.com) – A prefeasibility study (PFS) into the spherical graphite potential of the Siviour project, in South Australia, has confirmed project economics.

ASX-listed Renascor Resources said on Thursday that the spherical PFS estimated a capital cost of A$89.9-million to develop a spherical operation, with a combined spherical and concentrate project to cost some A$221.5-million.

The integrated operation is estimated to have a net present value of A$889-million and an internal rate of return of 53%, with the project expected to deliver 117 000 t/y of graphite concentrate over a mine life of 30 years. Some 61 500 t/y of the annual graphite concentrate production would be processed into around 29 085 t/y of spherical graphite.

“Siviour is uniquely advantaged in its potential to produce a high-quality spherical graphite product for the growing market for lithium-ion battery anodes,” said Renascor MD David Christensen.

“The low operating cost we expect to achieve at the graphite concentrate operation underpins a very high margin spherical graphite operation and offers more direct exposure to the lithium-ion battery market.

“Based on the expected sales price of spherical graphite, there’s a robust profit margin against our projected cost of production, which leads to strong free cash generation and rapid pay-back of capital.”

The consolidated project is estimated to deliver a net revenue of some A$7.6-billion, and a net profit after tax of some A$2.9-billion.

Christensen said that with nearly all spherical graphite used in the lithium-ion battery anodes currently sourced from China, the results of the PFS demonstrated Siviour’s potential to offer strategic diversification of supply.

Renascor will now undertake additional testing of the Siviour spherical graphite while continuing to accelerate the development of the project, including offtake and financing discussions and the completion of a graphite concentrate definitive feasibility study due in the next quarter.