MagnisResources Ltd. said March 31 that the bankable feasibility study onits Nachugraphite project in Tanzania confirmed the "outstanding" estimatedreturns for the project and demonstrated its low level of technical risk.
The BFS pegged a post-tax net present value of US$1.69billion, at a 10% discount rate, and a 98% internal rate of return for the project,while capital payback is projected within 14 months of first production with apre-production CapEx of US$269.0 million, including an 11% contingency.
Based on a 5 million-tonne-per-annum processing plant with anameplate capacity of 240,000 tonnes per annum of graphite concentrate, thestudy also said Nachu's ore reserves will provide enough material to support aninitial 15-year operating life.
The project's operating costs over the first five years ofproduction are forecast to be US$502 per product tonne, free on board, and thelife-of-mine production cost forecast is US$559 per tonne.
Furthermore, the unique crystal structure and low impuritiesin Nachu's graphite mineralization will allow for the production of a premiumproduct suite with an average concentrate purity of over 98% total graphiticcarbon, with a product basket price of US$2,350 per tonne, firmly targeted atthe lithium-ion battery sector.
In February, Magnis announcedan updated JORC-compliant mineral resource estimate for the Block F and BlockFSL deposits of the Nachu project, pushing its resources to 174 million tonnesgrading 5.4% graphitic carbon at a cutoff of 3% graphitic carbon, withsignificant high grade resource conversion potential.
Magnis further said it is in advanced discussions withpotential North American, European, Japanese and Korean customers on off-takeagreements. Likewise, project finance talks are also moving forward, with arange of financing being considered including the provision of senior debt.
Meanwhile, the lead engineer on the project's BFS is preparinga fixed price, turnkey proposal for the Nachu project.