Magnis Energy Technologies Ltd (ASX:MNS, OTCQX:MNSEF) has confirmed the strong financial and technical viability of the Nachu Graphite Project in Tanzania through a bankable feasibility study (BFS) update.
This update to the 2016 BFS has optimised the process plant design to produce a higher-grade product and protect flake size during processing.
The project’s unique combination of larger flake sizes and high purity concentrate positions it as a leading future supplier to meet the rapidly growing demand in the lithium-ion battery market.
What’s more, Nachu is the only graphite project to be awarded a special economic zone licence in Tanzania to produce advanced graphite products, including very high purity jumbo and super jumbo flakes as well as downstream products for lithium-ion batteries.
“Strong competitive position”
Magnis Energy Technologies CEO David Taylor said: “The update to the BFS demonstrates that the Nachu Graphite Project represents one of the best graphite production opportunities in today’s market.
“The project will produce a high quality, sustainable product that requires minimal purification, placing Magnis in a strong competitive position relative to others in the market.
“Our high purity graphite concentrate will provide lithium-ion battery manufacturers and other industrial customers with an attractive and competitive alternative to current sources in the global graphite market.
“The update to the BFS has focused on improving the plant process design to ensure it maintains our product quality advantage, utilising a more sustainable and efficient power supply, and reviewing the overall capital and operating costs of the project.
“As expected, and consistent with the mining industry as a whole, we have seen increases in capital costs from 2016, although opportunities remain to improve the current capital cost estimates as part of the next stage of optimisation and detailed engineering."
World-class graphite project
The update to the 2016 BFS confirms the Nachu Project as a world-class graphite project with strong technical and financial viability combined with impactful sustainability outcomes.
It updated the post-tax life of mine (LOM) of the project NPV10 of A$1.8 billion and project IRR of 51% with a payback period of 19 months.
Taylor adds: “Pleasingly, operating costs have remained relatively stable and position Magnis well in terms of expected margins.
“With existing offtakes in place and discussions with other major off-takers in key sectors well advanced, we are confident that the project will be strongly supported by project funders.
“Initial discussions with funders have commenced and we have received positive responses in relation to the overall bankability and attractiveness of the project.
“A rigorous financial risk management strategy will be put in place to ensure that Magnis can protect and enhance project returns as economic circumstances undoubtedly change over the course of the project life.
“I would like to thank the Magnis team and all our partners involved in the update to the BFS for the extensive work that has been completed."
About Magnis
Magnis Energy Technologies is a vertically integrated lithium-ion battery technology and materials company with strategic assets, investments and partnerships in the electrification supply chain.
The company's US-based subsidiary Imperium3 New York, Inc (iM3NY) operates a Gigawatt scale lithium-ion battery manufacturing project in Endicott, New York.
Magnis along with its joint venture and technology partner Charge CCCV LLC are the major shareholders in iM3NY, which has recently commercialised C4V's patented technology to produce green credentialed lithium-ion battery cells.
The company also has a minority stake in C4V and has exclusively licensed its anode processing technology intending to produce high-performance anode materials utilising very high purity natural flake graphite from the Nachu Project.
The company's vision is to enable, support and accelerate the green energy transition critical for the adoption of electric mobility and renewable energy storage.
Taylor adds: “Given the financial results demonstrated by the update, and the continued strength in the lithium-ion battery market driven by the growth of the electric vehicle and energy storage sectors, we are looking forward to advancing the project as quickly as possible.
“Our next milestones are making a Final Investment Decision (FID) and achieving financial close, which we are targeting to achieve by end Q2 2023.
“This is an exciting period of growth for the company, and we look forward to working with all stakeholders to supply high-quality materials that will generate positive economic, social, and environmental outcomes.”