PERTH (miningweekly.com) – Graphite developer Renascor Resources saw its share price surge on Friday after announcing an optimised development plan for Stage 1 of its Siviour graphite project, in South Australia.

The optimised development plan looked at increasing the 22 800 t/y Stage 1 production nearly four fold to 83 400 t/y, while providing for the construction of a similar sized processing plant in Stage 2 for a combined production rate of 145 000 t/y of graphite concentrate.

A 2018 prefeasibility study estimated that Stage 1 of the operation would require a capital investment of $29-million, with Stage 2 requiring a further $91-million in capital spend, while the two-stage operation would have a combined net present value of $407-million and an internal rate of return of 47%.

The optimised mine plan estimated a capital requirement of $78-million for Stage 1 and $56-million for Stage 2, with a combined net profit after tax of $313-million and an internal rate of return of 40%.

The optimised development plan followed on from in-principle support from the Dutch export credit agency (ECA) Atradius Dutch State Business for up to 60% of the projected capital expenditure for the Stage 1 operation.

“The potential to fund up to 60% of the Stage 1 capital costs on favourable finance terms through a guarantee from Atradius is a major breakthrough.

“As we continue to advance the development of Siviour through more advanced project finance and offtake negotiations, we are pleased with the potential of the new development plan to attract project financing and create opportunities to deliver stronger returns to shareholders sooner,” said Renascor MD David Christensen.

Renascor is working on the definitive feasibility study for the Siviour project, based on the production parameters outlined in the optimised development plan.

The study would be available in July.

Renascor shares were trading at a high of 2.2c a share on Friday, up from a low of 2c a share.