PERTH (miningweekly.com) – The bankable feasibility study (BFS) for the Nachu graphite project, in Tanzania, has delivered improved project economics, owner Magnis Resources revealed on Thursday.
The BFS confirmed that Magnis could develop a mine producing an average of 220 000 t/y of graphite concentrate over 15 years at a capital cost of $269-million.
The BFS estimated a net present value (NPV) of $1.69-billion and an internal rate of return (IRR) of 98%.
A 2014 prefeasibility study (PFS) estimated that the project would have a NPV of $1.04-billion and an IRR of 84%, based on a production rate of 180 000 t/y of graphite concentrate, with a mine life of 16 years. The PFS estimated capital costs of $171.4-million.
The Nachu project had a global mineral resource estimate of 174-million tonnes, grading 5.4% graphitic carbon, and represented one of the largest mineral resources of flake graphite in the world.
The mineral resource was split into five deposits, with the Block F mineral resource the primary orebody assessed in the BFS for initial production.
“The release of the BFS is another important milestone towards the development of the Nachu graphite project. It confirms that the project has outstanding projected financial returns, and details how premium graphite concentrate products of exceptional size and purity can be generated using low cost flotation processes with an exceptionally small environmental footprint,” said Magnis CEO Frank Houllis.
“These products are targeted into fast growing graphite markets such as the lithium-ion battery sector, and the BFS firmly demonstrates the commercial viability of the Nachu project to potential end-users.”
Houllis said on Thursday that Magnis was in advanced discussions with potential North American, European, Japanese and Korean customers on further cornerstone offtake agreements, while project financing discussions were progressing in parallel.
He noted that a range of financing alternatives were being considered, including the provision of senior debt.