PERTH (miningweekly.com) – A scoping study into the Lac Rainy graphite project, in Quebec, has estimated that the project could produce some 96 000 t/y of graphite concentrate over a mine life of 14 years.

ASX-listed Metals Australia on Wednesday reported that the project would require an initial capital investment of $118-million for the openpit mine, process plant and infrastructure, with contingency and owners’ indirect costs taking this amount to $189-million.

The scoping study estimated a life-of-mine operating cost of $433/t of concentrate, while average annual earnings before interest, taxes, depreciation and amortization have been estimated at $42-million.

The project’s pre-tax net present value has been estimated at $123-million, while its internal rate of return has been estimated at 18.9%.

“The scoping study clearly demonstrates the project’s very strong commercial potential which is centered on very low operating and capital costs and revenues derived from a premium product. Importantly, the project is not reliant on an unrealistically large scale to reduce operating costs and overly optimistic graphite pricing forecasts,” said Metals Australia director Gino D’Anna.

“We believe that as the world emerges from the current Covid-19 crisis, economies will start to rebuild and strengthen, resulting in significant funds being invested into alternative energy sources and electrification.

“We are already starting to see this in the lithium and cobalt market and believe it will not be long before graphite prices also start to increase. We see a lot of upside in the future demand for graphite and are positioning the company to take advantage of the change in market dynamics.”

D’Anna said that the Lac Rainy project offered significant flexibility, has projected low strip ratios, could be readily accessed through opencut mining methods, and has consistently delivered exceptionally high carbon and high purity concentrate products that exceed the industry standard benchmarks.

The project remains open to the north and south along strike, as well as down dip and plunge, indicating significant exploration upside and drill-ready targets.