Renascor Resources is pleased to announce the results of the Definitive Feasibility Study (DFS) for its Siviour Graphite Project (Siviour) on South Australia’s Eyre Peninsula.
The DFS confirms Siviour’s potential as a low-cost, long-life graphite project that can achieve consistently attractive profit margins even in the current lower graphite price environment. A summary of highlights relating to the DFS is detailed below.
- Robust economics: Optimised Battery Anode Material (BAM) Study confirms compelling economics of Renascor’s vertically integrated graphite mine and downstream Purified Spherical Graphite (PSG) facility entirely in South Australia (the BAM Project).
o Post-tax unleveraged NPV10 of A$1.5 billion.
o Post-tax unleveraged IRR of 26%.
o Average annual EBITDA of A$363 million.
- World-class, low-OPEX project: State-of-the-art BAM Project delivers globally competitive estimated PSG gross operating cost of US$1,782 per tonne over the first 10 years and US$1,846 per tonne over 40-year mine life (LOM), including Graphite Concentrate operating cost of US$405 per tonne over first 10 years and US$472 per tonne over LOM.
- Start-up CAPEX from existing cash and debt: Estimated capital requirement for initial upstream operation of A$214.5 million is expected to be funded via Renascor’s existing cash balance (A$129 million as at 30 June 2023) and debt facilities.
- Phased development strategy aligns downstream start-up with PSG market: Phased development plan, commencing with production of Graphite Concentrate before shifting to PSG, is designed to align with graphite market demand and to reduce execution risk prior to the initial downstream capital requirement of A$394.6 million.
- Funding sources: The Australian Government, through its Critical Minerals Facility, has conditionally approved a loan facility of A$185 million for the development of the BAM Project. In addition, Renascor is progressing discussions with Export Finance Australia (EFA), the Clean Energy Finance Corporation (CEFC) and commercial lenders. Renascor has also commenced discussions with potential project partners, including potential offtakers, regarding equity investments to help further meet the BAM Project’s capital requirements.
- Alignment with offtakers: Phased production of Graphite Concentrates and PSG aligns with positive feedback from anode manufacturers seeking to diversify supply of graphite with secure supply from low-risk mining jurisdictions. Potential offtake partners include POSCO and Mitsubishi Chemical, each of which have entered into non-binding strategic cooperation and offtake agreements with Renascor.
- Next steps: Renascor’s next immediate steps include securing binding offtake agreements, concluding lender due diligence and commencing early contractor involvement.