The Stage 1 Feasibility Study (FS) analysis showed a positive update to the pre-tax NPV of 7.5% of $58.9m, pre-tax IRR of 31.5% over a payback period of 2.9 years, a significant improvement compared to the metrics of the 2018 feasibility study
Volt updates feasibility study for stage1 Bunyu. (Credit: Kefentse Molotsane on Unsplash)
Volt Resources has unveiled a favourable feasibility study update for the first stage of its Bunyu Graphite project, with significant improvements compared to the 2018 feasibility study.
Bunyu Graphite Project is located close to the critical infrastructure with sealed roads and ready access to the deep-water port of Mtwara in Tanzania, East Africa.
Its Stage 1 development aims to establish Bunyu as a top supplier of graphite products, grow Volt’s existing natural flake graphite business, and support the Stage 2 expansion project.
The Bunyu Stage 1 project is based on a mining and processing plant throughput rate of 400,000 tonnes per annum (tpa) of ore to produce an average of 24,780tpa of graphite products.
Volt executive chairman Asimwe Kabunga said: “The delivery of an updated Stage 1 Feasibility Study is a key step towards unlocking the considerable underlying value of our world-class Bunyu Project. Once funding is obtained, the Company will proceed with rapid execution leading to the start of production.”
The Stage 1 Feasibility Study (FS) analysis showed a favourable net present value (NPV) and internal rate of return (IRR) over a payback period of 2.9 years.
The FS updates the pre-tax NPV of 7.5% of $58.9m, and pre-tax IRR of 31.5%, which represent significant improvements compared to the metrics of the 2018 feasibility study.
It enhanced the mine life for Stage 1 development from 7.1 to 13.7 years, with an average Freight on Board (FOB) operating cost of $670 per tonne.
The updated FS for the Stage 1 Bunyu project shows a total EBITDA of $169.6m over the 13.7-year mine life, with an average annual EBITDA of $12.4m.
Volt will optimise infrastructure, utilities, and mine development works to minimise the initial capital expenditure required, to enable a start-up capital cost estimate of $33.1m
Earlier this year, the company executed two binding offtake agreements for the entire natural flake graphite and fine product from the Stage 1 project, initially for five years, with an option to extend by an additional five years.
Volt CEO and managing director Prashant Chintawar said: “We thank our team, partners and consultants who have worked diligently on this project to deliver significantly improved economics.
“Despite widespread inflationary pressures across the industry, Volt has not only successfully kept capital expenditure and operating costs under control relative to the 2018 study but has also dramatically improved project financials.
“The Stage 1 graphite project is intended to be established with a modest capital expenditure, and allow Volt to develop the necessary infrastructure, start graphite production at a rate of 24,780 tonnes per annum, generate initial revenues, and establish Bunyu as a world-class supplier of graphite products.”