PERTH (miningweekly.com) – An updated feasibility study (PFS) into the Bunyu graphite project, in Tanzania, has improved the economics of the Stage 1 project.

The Stage 1 operation is based on a mining and processing plant throughput rate of 400 000 t/y of ore, producing on average 24 780 t/y of graphite products, and positioning ASX-listed Volt Resources as a dominant participant in the global flake graphite market.

The updated PFS has estimated a capital cost of $33.1-million, compared with the $31.8-million estimated in the 2018 PFS, with the project’s net revenue increasing from $268.6-million to $433.2-million, while its after-tax net present value increased from $14.7-million to $36.4-million, and its internal rate of return has increased from 19.3% to 23.6%.

The project’s mine life has also increased from 7.1 yeasr estimated in the original PFS to nearly 14 years.

“Despite widespread inflationary pressures across the industry, Volt has not only successfully kept capital expenditure (capex) and operating costs under control relative to the 2018 study but has also dramatically improved project financials,” said Volt CEO and MD Prashant Chintawar.

“The Stage 1 graphite project is intended to be established with a modest capital expenditure, and allow Volt to develop the necessary infrastructure, start graphite production at a rate of 24 780 t/y, generate initial revenues, and establish Bunyu as a world-class supplier of graphite products, particularly to the rapidly growing battery anode / electric vehicle market.

“The updated capex value is $33.1-million, which will establish a project with a 13.7-year period, almost double that of the previous study. This underwrites a project delivering total earnings before interest, tax, depreciation and amortisation over the period of $169.6-million, an internal rate of return (before tax) of 31.5%, an net present value (before tax) of $58.9-million and a payback period (before tax) of 2.9 years.

“These metrics are significantly improved across the board, which is a terrific achievement given the changed macro backdrop. This modest capital requirement and strong project financials, in conjunction with the two binding offtakes announced earlier this year, and a strong long-term graphite demand profile, all position Volt well for securing Stage 1 financing, and further reinforces this two-stage approach to development and commercialisation,” said Chintawar.

“Having commissioned Bunyu Stage 1, Volt intends to move to Stage 2 later this decade with the goal of leveraging the platform established by Stage 1, and Bunyu’s status as one of the largest graphite resources globally, to dramatically scale production from 24 780 t/y to 170 000 t/y and help meet the forecasted global increase in demand for graphite products.”