Renascor Resources land buy to accelerate push to graphite production

Renascor Resources acquiring freehold land that hosts its Siviour graphite deposit in South Australia
Purchase will facilitate additional on-ground preparatory works and the planned transition from development into construction
Company continuing to accelerate upstream portion of BAM project to meet forecast shortage in graphite concentrates

Special Report: Renascor Resources has entered into a land purchase agreement for the freehold property that hosts its Siviour graphite deposit in South Australia to facilitate the planned transition from development into construction.

The Siviour deposit has one of the largest graphite ore reserves outside of Africa with 16.8Mt at 8.2% total graphitic content, or 1.4Mt of contained graphite, enough to support graphite concentrate production of up to 150,000tpa for 40 years.

Renascor Resources’ (ASX:RNU) Battery Anode Material (BAM) study completed earlier this year found that the project can deliver a globally competitive gross operating cost for purified spherical graphite of US$1,782 per tonne over the first 10 years and US$1,846/t over LOM (life of mine).

This includes graphite concentrate operating costs of US$405/t over the first 10 years and US$472/t over LOM to deliver post-tax unleveraged NPV of $1.5bn, unleveraged IRR of 26%, and average annual EBITDA (earnings before interest, taxes, depreciation, and amortisation) of $363m

NPV (net present value) and IRR (internal rate of return) are both metrics used to assess the profitability of a project.

With graphite demand projected to continue growing and China moving to potentially restrict graphite exports, it is no wonder that the company decided to accelerate development of its planned BAM mine and manufacturing operation in South Australia.

Land deal

As part of this acceleration, RNU entered into the deal to acquire the entire freehold land underlying ML 6495, the site of the upstream portion of its proposed BAM project.

Acquiring this freehold land hosting both the Siviour deposit and the wider mineral lease will facilitate additional on-ground preparatory works and the planned transition from development into construction as part of its strategy to accelerate the upstream development to meet forecast near-term shortages of graphite concentrates.

“The land acquisition agreement announced today continues our successful collaboration with the Siviour family, the long-standing owners of the freehold land hosting the world-class Siviour graphite deposit, and provides a positive outcome for the both the Siviours and Renascor,” managing director David Christensen said.

“We look forward to continuing to work with the residents of the district as we look to provide significant new opportunities for the wider Eyre Peninsula community as we develop the world class Siviour graphite project.”

This article was developed in collaboration with Renascor Resources, 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.