6 Feb 2015resource reserve update▲ GoodMajor
The company released the long-awaited Feasibility Study for its 100%-owned Molo graphite project in Madagascar, which the Q4 2014 target had pointed to. It reports post-tax NPV (10%) of US$389.8 million, IRR of 31.2%, payback of 4.84 years, capital cost of US$149.9 million (US$188.2 million total with allowance and contingency), a 26-year mine life and proven plus probable reserves of 14.17 Mt at 7.0% C and 8.37 Mt at 7.04% C. These figures assume 50% debt and 50% equity funding and a satisfactory investment agreement under Madagascar's large-mining-investment law. The CEO says the aim is to secure offtake and project financing and to be in production by 2017, so financing remains an open question. The study's head grade (7.04% C) is lower than the PEA's 8.5% C, and annual concentrate output (about 53,017 t) is lower than the PEA's 84,000 tpa. Per the press release, a technical report is to be filed within 45 days. The feasibility study completion also appears to trigger the Malagasy payment of CAD$700,000 plus 1,000,000 shares (inference from the earlier purchase agreement terms).