SRG Mining expects to present an independent preliminary economic assessment (PEA) of its proposed integrated graphite venture next quarter after reporting positive results from an updated feasibility study on an openpit mine and concentrator at Lola in Guinea.
Germany’s Dorfner Anzaplan is said to be nearing completion of the PEA.
SRG described the updated FS as the initial phase of its “integrated business model” under which it aims to create a mine-to-market battery anode material producer with a coated spherical purified graphite conversion facility somewhere outside China.
Its update on a 2019 FS on Lola doubles annual production of graphite in concentrate to 94,000 tonnes per annum at a start-up capital cost of US$185 million versus $123m in the earlier study.
Life-of-mine average cash operating costs were put at US$585/tonne of concentrate with an average concentrate grade of 95.4% graphite.
SRG’s updated FS used a US$1400/t average sale price.
Lola has proven and probable reserves of 6.4 million tonnes grading 4.38% Cg (total carbon in graphite) and 34.5Mt of 4.09% Cg, respectively.
The revised plan includes an owner-operated processing facility using its own power generators – five units with 13 megawatts of installed capacity – as well as a logistics operation to the port of Monrovia in Liberia. SRG says it wants to investigate connecting the mine and plant to Guinea’s national electricity grid, “which would yield significant savings on the pre-production capital costs”.
“The average annual sustaining capital expenditure over a 17-year period is US$6 million,” it said.
“There is further scope to reduce these costs as the company explores the viability of third-party contractors working in close collaboration with the company on certain elements of the operating cost.”
SRG says it is encouraged by the “level of interest” shown by potential investors in the phase-one development. Several parties had also expressed interest in “joining forces” to establish a new supplier to “Western end markets”.
The company’s share price was down 3% on the news to C63c, capitalising it at $72m.
