Battery Minerals advances Montepuez graphite project, on track for November commissioning

Battery Minerals ASX BAT graphite Montepuez Mozambique crushing circuit
Crushing circuit being unloaded for Battery Minerals' Montepuez Project .

Graphite focussed Battery Minerals (ASX: BAT) has advanced development at its flagship Montepuez graphite project in Mozambique after awarding several key contracts and finalising and filling its water dams, with commissioning on track for November.

The company claims it is on schedule for its November commissioning with first shipments due in the March quarter 2019.

As one of the key contracts, Battery has appointed Dirk Coetzee as mine operations manager. According to Battery, Mr Coetzee has considerable experience in Mozambique and in graphite.

“The company has placed orders for all long-lead items to lock in delivery times, which will, in turn, help ensure we start commissioning Montepuez in late 2018,” Battery managing director David Flanagan said.

“The team has set a cracking pace and used the wet season to lock-down all key equipment supply contracts and get ahead on services and early works,” he claimed.

He added processing plant equipment had been mobilised to site and early stage earthworks were underway.

Battery is funding early development via A$10 million it raised late last year.

By the end of January, Battery had pinned down its fourth offtake deal for its Montepuez graphite – with all agreements equating to 80% of the anticipated 50,000tpa graphite concentrate production under stage one operations.

To meet the mounting graphite demand, Battery plans to expand output at Montepuez to more than 100,000tpa of graphite concentrate by 2022.

Morgans gives Battery increased price target

In late January, equity analyst Morgans released a report on Battery pushing the company’s target share price to A$0.26 – which was a 276% increase on the company’s stock price at the time of A$0.069.

This is not financial advice, see a financial expert before making any investment decision.

In its report, Morgans took into account the value engineering study completed on Montepuez to enable Battery to bring the project online as soon as possible and ramping up production in stages to reduce initial capital costs.

The analyst did point out Battery would require A$80 million to develop Montepuez. At the end of the December quarter, Battery had cash and liquid assets on hand valued at A$18.78 million.

Graphite market outlook

According to Battery, near-term graphite demand is estimated at around 2.5 million tonnes per annum. The company anticipates this demand will tip 4mtpa within six years, driven by the surging lithium-ion battery sector.

With graphite the current primary known anode material in the battery, analysts believe graphite demand will experience a large increase, while its traditional steel and manufacturing markets begin to pick up.

Shares in Battery lifted almost 2.5% in early morning trade to A$0.083.

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