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Northern Graphite's PEA review on Bissett Creek project ups value to C$198.2M

Northern Graphite Corp. said Dec. 12 that a review of the 2013 initial preliminary economic assessment for its Bissett Creek graphite project in Ontario increased its estimated posttax net present value and internal rate of return to C$198.2 million and 25%, respectively.

The 2013 assessment, which covered both the first and second phase of the project, pegged a posttax NPV of C$150 million and a 22% IRR for Bissett Creek.

The current review indicated a 5% increase in capital cost for phase one, with the total increasing to C$106.6 million from C$101.6 million, with a 20% increase in operating costs, to C$608.7 million from C$507.2 million, at current exchange rates and commodity prices, and with no change in resources or the mine plan.

"The large/XL flake nature of the deposit will allow the company to focus on high value, high margin industrial markets, mainly in the U.S. and Europe. While most of the attention on graphite is being generated by potential lithium ion battery and electric vehicle demand, these markets are supplied by small flake production from China and there is substantial excess capacity," CEO Gregory Bowes said.

"Growing demand will eventually overtake supply and new western sources are needed, but in the interim it remains a very competitive market," he added.

In June, Northern Graphite signed an off-take deal with a European commodity trader to sell 100% of the projected output from Bissett Creek in China.