Renascor Resources Ltd. said Feb. 8 that a scoping study for the production of spherical graphite from the Siviour deposit, part of the Arno project in South Australia, estimated a posttax net present value, discounted at 10%, of A$307.5 million with an internal rate of return of 59.9%.
Initial CapEx for the operation is pegged at A$77.1 million, to be paid back over a 1.7-year period. Posttax net profit from the operation is expected at A$818 million.
In May 2017, a scoping study presented a scenario for producing natural flake graphite products, pegged an after-tax net present value, discounted at 10%, of A$551 million and an IRR of 59% over a 20-year mine life.
Under the combined spherical graphite and flake graphite production option, the company estimated an net present value, discounted at 10%, of A$740.5 million and an IRR of 53.5%.
Initial CapEx under this scenario is approximately A$221.0 million, with a payback period of 1.9 years. Posttax net profit is A$2.0 billion.
The company completed a two-stage development option study in October 2017, which estimated a net present value, discounted at 10%, of A$370 million and an IRR of 46%, with the first phase occurring in the first three years and the second phase from the fourth year onward over a 23-year mine life.
Renascor expects to complete accelerated development at Siviour, including a pre-feasibility study of the graphite concentrate production option within the first quarter, potential off-take deals with end-users, and the completion of the mineral lease application.
