The highly anticipated pre-feasibility study (PFS) of Sarytogan Graphite Ltd (ASX:SGA) for the development of its giant, high-grade Sarytogan Graphite Project, sees the project “take its place as a very serious contender to play an important role in meeting the world’s energy storage needs”.
Sarytogan managing director Sean Gregory explained, “The physical attributes of the giant and exceptionally high-grade Sarytogan Graphite Deposit have shone through in the PFS which envisages low costs and high margins, even at the conservative project sizing selected to minimise risk.”
The PFS, described by the company as being "exceptional", outlines a staged development strategy at the project, which is strategically located in Central Kazakhstan, between Europe and China.
This strategy contemplates a low capex initial entry point for an upstream-only development, and then expansion downstream to allow higher-value products with further capital investment.
The PFS outlined the production of three product types, at their 10-year weighted-average sales prices:
- Microcrystalline graphite at >80% carbon (Micro80C) at US$746 to $791/tonne,
- Ultra-high purity fines (UHPF) at up to five nines purity at US$4,468 to $5,577/tonne, and
- Spherical purified graphite (USPG and CSPG) at US$2,500 and $8,000/tonne.
This results in attractive financial returns including a project net present value (NPV) of up to US$518 million, or A$797 million (at a US$0.65 exchange rate).
The company has planned a staged development and a conservative ramp-up is scheduled to minimise initial capital expense and match market penetration.
This staged development involves:
- Stage 1a – a nominal 50,000 tonnes per annum (tpa) beneficiation plant, underutilised at 43,750 tpa for the traditional graphite market until subsequent investment stages.
- Stage 1b – the concurrent addition of one 6,169 tpa thermal reactor to produce Ultra High Purity Fines (UHPF) at up to five nines purity for advanced industrial uses. Spheronisation is added at the pilot scale for customer qualification.
- Stage 2a – the addition of thermal reactors 2&3 in year 3.
- Stage 2b – the concurrent addition of 7,000 tpa of spheronisation and 4,000 tpa of coating capacity.
Staged development strategy and cumulative geared financial returns.
This scale of development has allowed the company to declare an ore reserve of 8.6 million tonnes at 30% total graphitic content (TGC), limited only by a nominal 60-year mine life.
Importantly, this maiden ore reserve consumes just 4% of the project's giant mineral resource — suggesting that the entire project could be replicated many times over.
The following video from Sarytogan provides a comprehensive overview of the proposed development:
Looking ahead
Sarytogan says it is well placed to drive the project forward, noting the planned $5 million investment from the European Bank for Reconstruction and Development, and has commenced early works for the definitive feasibility study (DFS). This will include:
- Further optimisation of the study – for example coating all the USPG in Stage 2b to achieve higher prices available for CSPG.
- Environmental permitting and progress towards grant of the mining licence.
- Further metallurgical variability testing for different ore samples from a range of depths and grades across the deposit.
- Trial mining of a 20-tonne ore sample for bulk comminution tests and generation of significant quality samples for customer qualification.
- Product marketing discussions.
“Coupled with the recent planned investment by the European Bank for Reconstruction and Development strengthening of our balance sheet, Sarytogan is in a strong position to drive the project forward with early works on the DFS already underway,” said Gregory.