Black Rock Mining (ASX:BKT) has completed an optimisation study on its pre-feasibility study for its 100%-owned Mahenge Graphite Project located in Tanzania.
The optimisation study adds a third staged module to take production to 250,000 tonnes per annum of 98.5% graphite concentrate for 31 years.
The second and third modules are expected to be funded from cash flow, enabling the company to deliver the entire operation for peak capital of only US$90.1mln.
This equates to industry leading peak capital of only US$360 per tonne per annum.
This positive result is driven by relative high grade, low strip ratios and industry leading product quality and attributes.
John de Vries, interim CEO, commented
“The optimisation study successfully builds out our crawl, walk, run strategy, ultimately delivering a world-class mine based on any metrics.
At a maximum run rate of 250,000 tonnes per annum, of the highest purity graphite concentrate on the market, with exceptionally low opex, and capex, this study places us in a strong competitive strategic position.
“As the market progressively starts to benefit from increased demand driven by the transition from petrol to electric vehicles, and demand for fire proofed panels for high rise buildings grows, demand for Mahenge’s premium product will grow.
“We continue to be highly confident we have the most compelling development stage graphite project globally and intend to quickly move into our definitive feasibility study phase to ensure construction risks are minimised.”
Still a US$905 million project
Revised financial metrics that incorporate a 16% government free carry and increased royalty rate still result in a post-tax unlevered project net present value (NPV) of US$905mln.
Importantly, this is using a realistic basket price assumption of US$1,241 per tonne delivering an operating margin of US$863 per tonne.
The financing process remains on track and is supported by two existing memorandums of understanding (MoUs) with end users of graphite concentrate.