Northern Graphite says it is seeking equity financing to relocate its processing plant from Okorusu to Okanjande by 2025.
The move follows the company’s decision to scale back operations at Okorusu in the third quarter of 2023.
The company said the timing for the restart hinges on securing financing, with options including royalties, streams, debt, and equity from strategic partners.
“The timing of a restart is subject to the availability of project financing. The company is evaluating options to fund the Okanjande project through the use of a royalty/stream/debt structure with equity contributed by a strategic partner. A full development schedule can be executed within 12 to 14 months once financing is available, with the intent to resume production in 2025,” Northern Graphite’s Chief Executive Officer Hugues Jacquemin said.
In August 2023 Northern Graphite unveiled findings from a new PEA, proposing the relocation of its processing plant from Okorusu to the Okanjande mine site instead of rehabilitating the current mill.
“The PEA indicated that economics remain attractive under the new plan, with higher capital costs but lower operating costs. In addition, greenhouse gas emissions are reduced, sustainability is improved, and the expansion potential of the project is substantially enhanced,” said Jacquemin.
Meanwhile, key results of the PEA included average annual production of 31,000 tonnes of graphite concentrate to be sold in U.S. and European markets, production costs of US$666 per tonne, a post-tax IRR of 36 percent, a post-tax NPV of US$70 million and a payback of under four years.
Results were based on a 10-year mine life and a weighted average graphite price of US$1,550/tonne.
Last year, Northern Graphite said the move would eliminate ore transportation costs and lead to better project economics.
“This scenario would represent phase 1 of an ultimate plan to build 100,000-150,000tpy of graphite production capacity adjacent to the Okanjande deposit to meet rapidly growing EV and battery demand,” the company said.
Northern Graphite began mining operations at Okanjande in 2017 and up until November 2018, the material was trucked 78km to the Okorusu Fluorspar Plant, which had been retrofitted to process graphite-bearing material.
The processing plant did not then perform to expectations and was put on care and maintenance at that time.
The company intends to capitalise on the growing demand for graphite from electric vehicle and battery manufacturers.
Graphite demand is expected to surge over the next few years as the world increasingly adopts EVs and energy storage systems. The mineral is a critical component of lithium-ion batteries, with each EV requiring around 60-80kg of graphite.
