Kingsland Minerals flags robust economics for graphite scoping study

• Kingsland Minerals reports strong financial results from Leliyn project scoping study
• Company says C1 operating costs are A$651/t graphite concentrate
• AISC is A$796/t with capital costs of A$342.7m and 4-year payback period

Special Report: A scoping study for Kingsland Minerals’ Leliyn project in the NT highlights its potential to be a globally competitive graphite producer.

The project is one of Australia’s most significant graphite deposits with a mineral resource of 192.5mt at 7.3% Total Graphitic Carbon (TGC) containing 14mt of graphite.

And Kingsland Minerals (ASX:KNG) said the scoping study for Leliyn’s development of a 1.5 million tonnes per annum (Mtpa) processing plant had flagged very competitive C1 operating costs of A$651/t graphite concentrate, with an average estimated operating cash margin of A$280/t graphite concentrate and an all-in sustaining cost of A$796/t graphite concentrate.

The project is estimated to produce a total of ~662,000t recovered graphite concentrate during a 6.9-year processing period for average annual production of ~95,000t graphite concentrate.

The estimated LoM revenue is A$1.05bn with an estimated operating pre-tax cash margin of A$563m, capital costs of ~A$342.7m and a payback period of four years.

Plenty of optimisation potential

The study also has extensive scope for optimisation which could deliver production increases with capital and operating cost reductions, with room to grow the inventory beyond the current resource.

Upgrading more of the resource into the indicated category would improve processing throughput, plus the crushing, grinding and flotation parameters could also be improved to maximise recovery and concentrate grades.

“These are strong results which highlight the excellent outlook for Leliyn,” KNG manging director Richard Maddocks said.

“Importantly, the C1 or cash operating cost is forecast to be just US$423/t of concentrate produced, which is very competitive with current operations worldwide.

“This result is even more promising given that we only had a limited amount of mineralisation to utilise for the study.

“With more drilling and increased indicated resources, we are confident that we can build on this result and establish a long-life, profitable graphite concentrate operation.”

Kingsland says the next step now is to take advantage of Leliyn’s considerable potential to appropriately size the project to take advantage of economies of scale.

This article was developed in collaboration with Kingsland Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.