Highly positive Preliminary Feasibility Study results for the Vittangi graphite project in Sweden has seen a sharp increase in 100%-owner Talga Resources’ (ASX: TLG) share price today.
The study confirmed a technically and financially robust operation producing a high-performance fully engineered and coated lithium-ion (li-ion) graphite battery anode product, Talnode-C, for the global li-ion battery supply chain.
Pre-tax Net Present Value for the project came in at US$1.06 billion with a strong pre-tax Internal Rate of Return of 55%.
The project will be a staged conventional open-pit mining operation with on-site concentrator and coastal anode refinery.
Initial stage is designed as a low capex toll processing operation over 2 years to feed the Stage 1 anode refinery for output of 2,500 tpa Talnode-C. Stage 1 capex is estimated to come in at $US27 million.
Stage 2 will then see a scaling up to steady state full-scale production of 19,000 tonnes per annum (tpa) of Talnode-C. Stage 2 capex has been estimated at $US147 million with annual revenue of US$210 million.
Over the 22-year mine life, the project is expected to generate a Life of Mine (LOM) revenue of around US$4.1 billion.
“The outcomes of the PFS support Talga’s move to produce fully value-added graphite products for li-ion batteries,” Talga Managing Director Mark Thompson said.
This is the most immediate path to significant revenue for Talga and aligns with our vertically integrated business that sets us apart from peers.
Mr Thompson said next steps include a Stage 1 Definitive Feasibility Study (DFS) to be completed by first quarter 2020 to further optimise scale, in line with growing li-ion battery anode demand.
Talga is also progressing with discussions on funding initiatives with customers and potential strategic partners to take the Project into production, targeting commencement of Stage 1 in 2020.
News of the outstanding results saw Talga’s share price jump as much as 10c, or 18%, to an intraday high of 65c with almost 700,000 shares changing hands by 11:30am AEST.