The FS estimates a post-tax net present value of $370m for the expansion of the graphite mine
The Molo graphite mine expansion in southern Madagascar requires capex of $161.7m. (Credit: NEXTSource Materials Inc.)
NextSource Materials said that the expansion of its fully-owned Molo graphite mine in southern Madagascar will require a project capital expenditure (capex) of $161.7m, based on the findings of a feasibility study (FS).
The estimated capital cost includes process equipment, civil and infrastructure, mining, buildings, electrical infrastructure, project and construction services. It also covers a contingency of $21.2m.
NextSource Materials said that the expansion of the graphite mine’s current phase 1 production capacity of 17,000 tonnes per annum (tpa) will be done by constructing an additional and independent processing plant.
The new plant will increase the steady-state production rate to 150,000tpa of SuperFlake graphite concentrate over a 25-year life of mine (LOM).
The FS estimates a post-tax net present value (NPV) of $370m for the expansion of the graphite mine.
It also projects a post-tax internal rate of return of 29% for the Molo mine expansion with a payback period of 3.1 years.
NextSource Materials president and CEO Craig Scherba said: “We are very pleased the FS 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.
“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.”
According to the FS, the additional processing plant will be set up near the current phase 1 processing facility, whose production is presently being ramped up.
The expansion of the Molo graphite mine will leverage the company’s fully modular build approach which was used for constructing the phase 1 processing plant.
Located in the Toliara province, the Molo mine has a simple open pit mining operation. The commissioning of the graphite mine started in March 2023.