QUEBEC – Focus Graphite of Ottawa has released the feasibility study for its Lac Knife graphite project 27 km southwest of Fermont. Prepared by Met-Chem Canada, the study examined a 25-year open pit and concentrator with an after tax net present value of C$383 million discounted at 8%, an internal rate of return of 30.1%, and a capital payback period of 3.0 years.
Bumping up the base case price of US$1,713 per tonne of concentrate to the forecast of US$2,256 in 2016, significantly enhances the economics. The NPV becomes C$624 million, the IRR grows to 41.8%, and the payback period shrinks to 2.1 years.
Focus said the feasibility study cut operating costs to C$441 per tonnes from the C$458/t suggested in the updated preliminary economic study released in November 2013. Mining costs are pegged at C$17.85 per tonne of ore, and processing costs will be $33.66 per tonne of ore. Further analysis of the projected costs will continue as detailed engineering begins later this year.
The Lac Knife deposit contains proven and probable reserves of 7.86 million tonnes grading 15.13% Cg (graphitic carbon). Pre-production capital expenses are estimated to total $165.55 million.
More detailed information is available at FocusGraphite.com.