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TORONTO (miningweekly.com) – Madagascar-focused Energizer Resources on Monday said a series of milestones at its flagship Molo graphite project, and recently updated mineral resources had led it to expect improved economics from a feasibility study currently under way.
The company’s shares jumped more than 16% in early trade on the TSX on Monday to C$0.185 a share, before falling back to C$0.165 apiece around noon.
The company in February published the results of a preliminary economic study (PEA) for the project, which had found it to hold an after-tax net present value (NPV), using a 10% discount rate, of $341.8-million, and an after-tax internal rate of return (IRR) of 41%.
The project was expected to cost $162.04-million to construct and would produce about 84 000 t/y of 98% to 98.6% pure flake graphite, which could sell at an average market price of about $1 564/t. The project was expected to have a three-year payback period.
“The recent metallurgical results indicating that nearly half (47.4%) of the graphite concentrate produced from the Molo composite material submitted for analysis, at SGS, consists of large and jumbo flake graphite at a grade of 96.8% carbon, was certainly a pleasant surprise, as the highest quoted natural flake graphite prices are those for +80 (large flake) at purities greater than 95% carbon,” president and COO Craig Scherba said in a statement released on Monday.
Energizer added that it had managed to produce an ultra-high purity concentrate of 99.9% carbon, with first-pass, single-stage hydrometallurgical purification, with all its graphite concentrate able to be upgraded to this purity level.
“We are also pleased to note that we can achieve high-purity grades through flotation or physical processing alone, which has significantly less expensive operating costs than achieving ultra-high purity through chemical or pyrometallurgical methods,” Scherba said, noting this potentially positioned the company as one of the lowest-cost producers of ultra-high purity graphite.
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