NextSource Materials Inc has released the results of a feasibility study that demonstrate the favourability of proceeding with the next stage of expansion at the Molo graphite mine and production facility in Madagascar.
The plan is to boost steady-state production of 150,000 tonnes of graphite concentrate per year.
Capital costs are estimated at US$161.7mln, including contingency.
The net present value comes out at US$424.1mln and the internal rate of return at 31.1%.
The expansion will also be significantly de-risked through the application of NextSource's all-modular construction approach and the sharing of infrastructure with existing operations.
Mine life is set at 25 years.
"We are very pleased the feasibility study confirms the strong financial potential of a larger scale operation and significant scalability of our Molo graphite mine to meet the robust market demand for flake graphite for use in electric vehicle batteries,” said Craig Scherba, chief executive of NextSource.
“This is especially timely given the recent announcement of export restrictions on flake graphite and graphite anode material from China. An expansion of this magnitude will position NextSource as a major global supplier and underpins our vertical integration strategy to offer an ample and secure supply of graphite flake for our planned battery anode facility, enabling direct supply to the electric vehicle battery market."
Ongoing discussions with numerous OEMs and battery anode offtake partners indicate market demand for graphite over the long-term is expected to rise and could support additional expansions of the Molo's mine processing capacity.
The company has not yet made a construction decision in respect to the expansion and will discuss the feasibility results with its strategic partners to determine the optimal timing and assess the funding options that are available with respect to this potential mine expansion.