RENASCOR Resources (ASX: RNU) has completed the Definitive Feasibility Study (DFS) at its 100pc owned Siviour graphite project in South Australia.
The proposed Siviour mine would be an open pit with an adjacent graphite production plant, which the company said has the potential to be a world-class, low OPEX project.
The DFS, completed by Royal IHC and Wave International, has been based on staged development, aiming for an average production of 80ktpa during the first stage, before expansion in year five that would be funded through the expected cash flows, ramping up production to 144ktpa between years five to 10.
The projected life of mine operating cost is expected to be about $508/t, which according to the company is amongst the lowest projected costs in the world.
Renascor said it would need about $118m for start-up capital, allocating about $4m for a mining pre-strip.
The post-tax NPV was estimated at $338m with an IRR of 33pc.
Renascor managing director David Christensen said that despite the current state of the graphite market, the Siviour project has the potential to deliver attractive profit margins.
“With the DFS now complete, we look forward to advancing towards securing binding offtake agreements and working with our finance partners to secure finding for Siviour’s stage-one development,” he said.
“We believe this cost advantage, coupled with our location in the low sovereign risk jurisdiction of South Australia, will enable Siviour to become a premier provider of graphite for the growing lithium-ion battery market, as this sector becomes the dominant end-used of natural flake graphite.”
The company will also need to secure final project permitting, which involves addressing the conditions set by the Government’s two-stage assessment and approval process.
Renascor aims to lodge its Program for Environment Protection and Rehabilitation before the end of 2019.
