TORONTO (miningweekly.com) – Thunder Bay, Ontario-based explorer Zenyatta Ventures has published a positive preliminary economic assessment (PEA) on its flagship Albany hydrothermal graphite project, near Hearst.

Consulting engineering firm RPA prepared the PEA with milling input from SGS Canada.

The $411.47-million Albany project would entail an openpit mine and 3 000 t/d processing plant with a 22-year life. The deposit was open at depth, with the potential for extending operations further underground.

Albany would produce about 30 000 t/y of high-purity (greater than 99.9%) graphitic carbon. It would produce about $4.8-billion in gross revenue over the mine life and have an after-tax average annual cash flow of $110-million.

The base case scenario calculated an after-tax net present value at a 10% discount of $438-million and an after-tax internal rate of return of 24%.

“This is a very important milestone for Zenyatta that started with the discovery of a rare graphite deposit in 2011 and has now gained global recognition for its unique purity and crystallinity. Zenyatta’s early-stage study has resulted in extremely encouraging economics that will support discussions with potential strategic partners and financiers,” Zenyatta president and CEO Aubrey Eveleigh pointed out.

The company stressed that hydrothermal graphite deposits, such as Albany, were "extremely" rare, being "extremely" pure and easily upgraded. It could be a low-cost source of high-purity graphite without the use of dangerous and environmentally harmful hydrofluoric acid (as employed in China) or costly thermal upgrading, as used when producing synthetic graphite derived from petroleum coke.

Demand for graphite was expected to rise exponentially, as a number of new technologies were starting to have a meaningful impact on the market, specifically lithium-ion batteries, fuel cells, vanadium-redox batteries and, in the future, pebble bed nuclear reactors.

According to a market report published last week by Persistence Market Research called 'Global Market Study on Graphite: Battery Segment To Witness Highest Growth by 2020', the global graphite market was valued at $13.62-billion in 2013 and was expected to grow at a compound annual growth rate of 3.7% from 2014 to 2020, reaching $17.56-billion in 2020.