Name and Location
Coosa graphite project, Alabama, US.

Client
Alabama Graphite Corporation (AGC).

Project Description
A preliminary economic assessment (PEA) of the Coosa project has demonstrated it has strong economics and excellent potential to become a near-term producer of high-value, ultrahigh-purity specialty graphite products for the burgeoning American green-energy markets.

The project has indicated resources of 78.49-million tonnes grading 2.39% graphitic carbon and inferred resources of 79.43-million tonnes grading 2.56% graphitic carbon.

AGC’s strategy is to exclusively target the oxide portion of the Coosa project’s mineral resource and, subsequently, to divert 100% of primary graphite production to secondary-processed, speciality high-purity graphite using the company’s proprietary low-temperature purification process.

The PEA proposes a 27-year, openpit mine with a mill and primary processing plant located on site at the Coosa graphite project.

A purification plant for secondary processing to produce speciality graphite products will be located in the vicinity of Rockford, Alabama. Access to natural gas in this location is key for AGC’s purification plant furnaces.

AGC intends to locate primary and secondary processing plants close to each other to generate a potentially strong yearly cash flow and a high rate of return.

Primary and secondary processing plants are forecast to produce 5 000 t of speciality high-purity graphite products
a year, ramping up to 15 000 t/y in Year 7.

Net Present Value/Internal Rate of Return
The project has a base case pretax net present value (NPV), at an 8% discount rate, of $444-million, with payback of 1.9 years; and a post-tax NPV, at an 8% discount rate, of $320-million, with a payback of two years.

The project has a pretax internal rate of return (IRR) of 52.2% and a post-tax IRR of 45.7%.

Value
Initial capital expenditures (capex) for mining operation and primary and secondary processing plants for the first five years of production are estimated at $43.2-million.

Subsequent capital expenditures for production expansion – starting from Year 5 onward – are estimated at $84.4-million, representing a grand total of $127.6-million in capex for the 27-year life-of-mine, and will be funded through free cash flow.

Duration
Not stated

Latest Developments
The technical report has concluded that the PEA is positive and recommends the Coosa project be advanced to the feasibility stage of development.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
AGC director of investor relations Ann-Marie M Pamplin, tel +1 416 309 8641 or email apamplin@alabamagraphite.com.