(Kitco News) - Graphite One (TSXV: GPH) announced today that the pre-feasibility study (PFS) for the Graphite One project delivered pre-tax internal rate of return of 26.0%, using an 8% discount rate, with a net present value of $1.93 billion and a payback period of 4.6 years.
The company said that the post-tax internal rate of return is 22.0%, using an 8% discount rate, with net present value of $1.36 billion and a payback period of 5.1 years, before accounting for tax credits enacted by the U.S. Inflation Reduction Act of 2022, effective December 31, 2022.
The company added that the project’s Measured plus Indicated resources increased 197% over 2019 results while Inferred resources increased 177%.
According to a press-release, Graphite One envisions a parallel strategy to simultaneously develop a commercial scale lithium ion battery anode materials manufacturing facility in Washington State and the Graphite Creek mine in Alaska. Manufacturing would begin with purchased materials until Alaska production is available.
The Graphite Creek mine is planned as a conventional open-pit operation using drilling, blasting, loading and hauling. Over a 23-year life, the mine is expected to produce 22.5 million tonnes of ore with an average grade of 5.6% Cg, at a 2.2:1 strip ratio. Peak mine production is expected to be approximately 11,000 tonnes per day. The mine would produce an average of 51,813 tonnes per year of graphite concentrate.
The Graphite One project is planned as an integrated business operation to produce lithium ion battery anode materials and other graphite products for the U.S domestic market on a commercial scale using primarily natural graphite from Alaska.
Importantly, Graphite One said that resources associated with the company’s Alaska State mining claims were cited by the U.S. Geological Survey in January 2022 as America’s largest natural graphite deposit.
The company anticipates that there will be a business opportunity presented by the projected strong U.S. demand for anode materials beginning in this decade and the time required to permit and construct a mine, the PFS plans the parallel design, permitting and construction of the secondary treatment plant (STP) and the mine. Permitting and construction of the STP is estimated to take 3 years.
The STP is designed to produce lithium ion battery anode materials on a commercial scale for the U.S. domestic market using natural graphite from Alaska as soon as it is available. At full capacity, it requires about 34.5 hectares (85 acres) of land, consists of 17 buildings, and would annually produce about 77,000 tonnes of manufactured graphite products.
The STP would operate during the first four years by processing purchased graphite. The mine would begin production in the third year of STP operation and begin supplying graphite to the STP in its fourth year of operation. By the fifth year, it is anticipated that Alaska graphite would supply 100% of the STP’s planned natural graphite requirement at full capacity. If the mine begins production sooner, purchased graphite would be reduced accordingly.
