UK-listed junior Blencowe Resources has completed an internal preliminary economic assessment (PEA) for its graphite project in Uganda, the results of which paved the way for the company to start work on a prefeasibility study (PFS) using an independent consultant.
The internal PEA estimates that the Orom-Cross project will produce 75 000 t/y of graphite sold as concentrate at an operating cost of $498/t, which Blencowe says is one of the lower-cost graphite projects worldwide.
The project yielded a net present value, using an 8% discount, of $317-million and an internal rate of return of 49% with a 13-year life-of-mine (LoM). Initial capital costs are estimated to be $80-million, with a four-year payback period.
Blencowe estimates that there is a two- to three-billion-tonne flake graphite deposit at Orom-Cross, with 16.3-million tons already drilled to Joint Ore Reserve Committee-compliant standard, covering the initial LoM.
The deposit has high grades of 97% to 98% total graphite content, with low impurities, high recoveries and a strong mix of jumbo/large flakes within the overall end-product.
“The current internal PEA underpins our view that we have a robust project that we will now advance to the next stage of development,” executive chairperson Cameron Pearce comments, adding that he is confident project economics can improve further, notably by extending the LoM or increasing the levels of production.
The next step in the project development is to issuea revised resource by the end of 20201, which will underpin the PFS in the first half of 2022.