Renascor Resources has fast-tracked development of massive deposit yielding high-grade graphite concentrates at a cost low enough to compete anywhere in the world.
|Image courtesy ©Renascor|
Australia could be two years away from becoming home to one of the world’s largest graphite mines, with Adelaide-based junior miner Renascor Resources given a big boost towards its plans to turn Australia’s biggest graphite resource into a producing mine by 2021 after a European governmental agency earmarked substantial financial support.
Renascor Resources, which has a market capitalisation of around AU$23 million, has received in principle support for up to 60 per cent of an estimated AU$108 million capital expenditure to build its initial graphite production facility from The Netherlands’ Export Credit Agency.
The Siviour mine site, which will be built near Arno Bay in South Australia’s Eyre Peninsula, has the potential to provide significant royalties and export revenues for South Australia’s economy.
More than 100 jobs are expected to be created during construction, with an additional 100 jobs expected during operation.
The Government of The Netherlands’ Export Credit Agency, known as Atradius, has issued a Letter of Interest in April confirming in principle project finance support for Siviour.
Atradius’ support in part results from Renascor’s strategic engineering partnership with Royal IHC, a major Dutch EPC contractor with significant expertise in mining projects.
Renascor will now commence a due diligence process to formally obtain the export credit guarantee from Atradius.
Backing from the European government agency, which seeks to promote Dutch exports, provides the potential for Renascor to secure favourable debt arrangements to build a processing facility for its planned Siviour mine site.
Renascor Managing Director, David Christensen sees the latest development as a potential game-changer, giving Renascor much greater access to the debt markets and enabling the company to accelerate its financing plan.
“One of the greatest challenges facing graphite development companies is putting together secure financing. We believe that Atradius’ support may provide Renascor with a credible finance solution to permit Renascor to transition from development into mining,” commented Mr Christensen.
Renascor drilled Siviour extensively and sent tonnes of samples for analysis in laboratories in Europe, North America, Australia and China, each of which confirmed a high-quality, high-grade deposit.
The company is confident that Siviour has the potential to be a highly competitive mine, in large part due to the deposit’s relatively unique flat-lying orientation, which permits it be mined at a relatively low-cost. Access to existing infrastructure in coastal South Australia is another benefit.
“Our goal is to give Australia a world-class graphite mine that can compete in any price environment with any development in the world,” Mr Christensen said.
“Graphite is easy to find and relatively easy to mine,” he said. “The hard part is producing a high-quality product at a low enough cost to be able to finance the mine’s development and stay in business. We think this is the real difference with Siviour.”
Siviour is Australia’s biggest graphite deposit and one of the largest reported graphite deposits in the world. Renascor Resources also recently announced a Mineral Lease had been granted by the South Australian Minister for Energy and Mining.
Flake graphite fetches between US$600 a tonne and US$1800 a tonne, depending on size and purity. Spherical graphite, refined from flake, fetches around US$3600 a tonne.
Renascor is also considering a spherical graphite refinery. This was confirmed by positive data released, as part of its Prefeasibility Study (PFS) earlier this year.