JOHANNESBURG (miningweekly.com) – Australian company Triton Minerals is gearing up to start early construction work at its Ancuabe graphite project in Mozambique in May next year, after a definitive feasibility study (DFS) boosted its confidence in building a mine to supply the premium end of the graphite market.
The DFS determined that Ancuabe would require preproduction capital of $99.4-million to build a mine that is capable of producing about 60 000 t/y of graphite concentrate.
Triton said the DFS displayed robust economics, highlighted by average yearly revenue of $82.6-million and earnings before interest, taxes, depreciation and armortisation margins averaging 53% over a 27-year evaluation period.
The study estimates a pretax net present value of $298-million, a pretax internal rate of return 36.8% and near-term payback of 3.8 years.
“Ancuabe has market leading large/jumbo flake size distribution combined with high purity levels across all flake sizes making it suitable for both the lithium ion battery market and expandable graphite, where demand is being driven by flame retardant building materials. Our project will be based on simple mechanical flotation methods, avoiding the environmentally challenging acid purification treatments currently being used in China, which is the world’s largest producer of natural flake graphite,” Triton MD Peter Canterbury said.
The positive DFS allows Triton to focus on finalising offtake agreements, financing agreements, local approvals and early works engineering and procurement to enable a final investment decision in the first half of next year.
Early work on the site is expected to start in May and will mainly be focused on establishing the construction camp, raw water dam construction and plant site preparations.
A ten-month construction period is expected to start in August, subject to a final investment decision, government approval and financing.
The company also said that it would shift its project execution strategy to a project management contractor model, representing Triton and potentially a Chinese engineering, procurement and construction model, rather than a previously contemplated engineering, procurement and construction management model.
The DFS has been used as the basis from which to estimate an ore reserve of 24.9-million tonnes at 6.2% total graphitic content, for 1.5-million tonnes of contained graphite, at the Ancuabe T12 and T16 deposits.
Shares in Triton gained 12.5% on the ASX to trade at 8.1c a share in the late afternoon.