A Battery Minerals graphite project in Mozambique is tipped to deliver “outstanding” financial returns after a study flagged a 66 per cent cut to project set-up costs.

Montepuez features three high-grade graphite deposits containing large flake graphite used in batteries.

The project lies near the town of Montepuez, 200km west of the port of Pemba. The road to port is asphalt-based and suitable for large trucks.

The study found that by adopting a series of key operating changes, the Montepuez project would deliver “extremely strong economics”.

The project is now expected to cost $US42.3 million ($54 million) compared to the previous estimate of $US126 million. Operating costs have been cut from $US422 per tonne to $US337.

Cost reductions would be drawn from a staged production ramp-up, smaller infrastructure footprint, and a refined mine plan producing higher head grade.

The study also anticipates an owner-operator mining strategy.

Shares in Battery Minerals closed yesterday at 6.5c  with market cap of around $29 million.