Manganese development company Giyani Metals last month announced an update to the preliminary economic assessment (PEA) previously updated and published in the first quarter.

The most recent updated PEA incorporates a 36% increase in the inferred mineral resource (IMR) estimate resulting in a 21% increase in after-tax net present value (NPV) from $275-million to $332-million, at a 10% discount rate, and is driven by changes in five parameters.

The first parameter was the change in final saleable product from high purity electrolytic manganese metal (HPEMM) to high purity manganese sulphate monohydrate (HPMSM).

HPMSM requires fewer processing steps and consumes less energy compared to production of HPEMM.

Based on feedback from battery manufacturers during the last year, the company believes HPMSM is the preferred precursor material for the production of the nickel/cobalt/manganese cathodes used in lithium-ion batteries, especially for the electric vehicle market, and aligns with the company’s strategy to be a low- or zero-carbon footprint producer.

The second parameter was influenced by associated changes in process flow, capital and operational expenditure for the production of HPMSM.

The third was a comprehensive remodelling of the geological model, wireframes and block model incorporating all previous drilling results available at the time of reporting, as well as the results from 11 holes from the recently completed infill drilling programme

The fourth parameter is driven by reducing the cut-off grade to 7.3% manganese oxide.

And finally, a more accurate determination of the depletion caused by historical mining.

“We are delighted with the results of the work by our team on the ground in Botswana and our team of consultants working on the revised process flowsheet and costing of the HPMSM salt option,” said Giyani CEO Robin Birchall.

He added that the significant increase in the resource base is extremely pleasing and the company hopes to add additional tonnes as it completes the assaying of the resource holes and starts its exploration programmes at the K.Hill extension near Kanye and at Otse, near Gaborone, in Botswana.

“I would like to thank the team for all their hard work,” he said.

Other PEA Highlights

The updated assessment includes an eight-year mine life and ten-year project operating life, producing 891 000 t of HPMSM.

The assessment also incorporates the 1.7-million-tonne IMR estimate for K.Hill.

Notably the pre-tax NPV of $431-million and post-tax NPV of $332-million, using a 10% discount rate is included in the PEA.

Additionally, the assessment notes about $153-million of the life-of-mine capital requirement, of which $118-million (C$157-million), is pre-production capital.

Finally, it states that an after-tax internal rate of revenue of 80% and a three-year payback period is anticipated.

The updated mineral resource estimate is now 1.7-million tonnes, grading 25.7% manganese oxide at a cut-off grade of 7.3% manganese oxide.

The economics are based on a projected average price of $1 588/t for HPMSM with a 32% purity, over the project life.

The average price of the product is based on an independent market study commissioned by the company.