A scoping study into the feasibility of Renascor Resources’ (ASX: RNU) Siviour graphite project in South Australia has indicated the project’s economics could be boosted by adding downstream production of spherical graphite.
The study revealed around 30,000 tonnes per annum of spherical graphite could be produced at Siviour, generating a net after tax profit of A$818 million based on stand alone spherical graphite production.
Start-up expenses for a spherical graphite operation are projected at A$77.1 million.
With integrated graphite concentrate and spherical graphite production, the scoping study indicates the potential for a net after tax profit of A$2 billion.
This includes producing 123,000tpa of graphite concentrate, with 60,000tpa to be processed into spherical graphite and the remainder sold as a graphite concentrate.
Speaking with Small Caps, Renascor managing director David Christensen said most spherical graphite for lithium-ion battery anodes is currently sourced from China.
He said the scoping study results for Siviour revealed the potential to offer the lithium-ion battery market a diversified spherical graphite product that was mined and processed in Australia.
“Given the growing importance of spherical graphite in the lithium-ion battery supply chain, this represents a high value market for extracting maximum value from Siviour,” he added.
Siviour encompasses 1,370 square kilometres of granted exploration licences and is in proximity to local towns and ports in South Australia as well as access to power, roads and rail.
The company claims Siviour hosts one the world’s largest known graphite resources which sits at 80.6 million tonnes grading 7.9% total graphitic carbon for 2.2mt of contained graphite.
Renascor is currently evaluating the advantages of a low capital and smaller operation that can be expanded in stages or immediately launching into a larger scale production.
A graphite concentrate pre-feasibility study is underway and due to wrap up by the end of the quarter. Additionally, further test work on graphite concentrates and producing spherical graphite are planned, including purification and battery anode testing.
As offtake discussion progress, Renascor is also looking to undertake advanced feasibility studies.
A mineral lease application is scheduled to be lodged by July.
By early afternoon trade, Renascor’s stock price had dipped 2.78% to A$0.035.