PERTH (miningweekly.com) – A scoping study into the Flanagan Bore manganese project, in Western Australia, has confirmed that the project could produce at an average rate of 1.8-million tonnes a year over a 20-year mine life.
ASX-listed Black Canyon on Thursday said that the project would likely require a capital investment of $44-million, and would have a pay-back period of less than four years.
The scoping study estimated that revenue over the life-of-mine would reach A$2.2-billion, with earnings before interest, taxes, depreciation and amortisation of A$420-million, with an average annual yearly free operating cashflow of A$32.1-million for the first four years of the mining operation.
The study also estimated a pre-tax net present value of A$134-million and an internal rate of return of 67%.
“The scoping study results clearly demonstrate significant value from a future mine development at Flanagan Bore,” said Black Canyon MD Brendan Cummins.
“The key financial metrics are robust and in line with the company’s strategy of discovery and delivery through de-risking the project as we progress the development schedule. This is reflected with the infill drilling recently completed to upgrade the mineral resources classification.
“The utilisation of lower risk conventional dense media separation as a primary separation technique will be further evaluated with the processing of life-of-mine composite metallurgical samples and several variability composites.
“Ancillary mining requirement studies are also commencing, with the search for processing water identified as a high priority in addition to understanding the infrastructure requirements. The company is also planning and scheduling environmental studies and will further engage with stakeholders as we escalate environmental, social and governance-related activities in the project area.”
Cummins noted that in parallel, Black Canyon will evaluate the longer-term ambition of downstream processing manganese ores from the potential long-life operation at Flanagan Bore to produce manganese sulphate for electric vehicle batteries.
“The initial leaching test work is almost complete and a comprehensive scope examining leaching, purification and crystallisation of high purity manganese sulphate (HPMSM) has been finalised and will be commencing soon.
“The company recognises the tremendous global growth in electric vehicle demand within traditional lithium nickel cobalt (NCM) cathode-based batteries and in evolving battery chemistries such as the recently released M3P (CATL) battery that includes manganese within lithium iron phosphate (LFP) batteries.
“Significantly, the addition of manganese into M3P batteries increases energy density but at a similar manufacturing cost to the widely used cheaper/volume LFP batteries that are used more commonly in mass-produced electric vehicles. This should translate into even higher demand for HPMSM going forward as the manganese is increasingly sourced for both NCM and M3P battery chemistries,” said Cummins.