08/01/2020 - 11:54

MRC lifts stake in graphite project

08/01/2020 - 11:54

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Mineral Commodities will move to 90 per cent ownership of the Munglinup graphite project in Western Australia after striking a deal worth $9.8 million with joint venture partner Gold Terrace. It comes after completion of a definitive feasibility study that put a $US61 million cost on the project.

MRC lifts stake in graphite project
Mineral Commodities will move to 90 per cent ownership of the Munglinup project.

Mineral Commodities will move to 90 per cent ownership of the Munglinup graphite project in Western Australia after striking a deal worth $9.8 million with joint venture partner Gold Terrace.

MRC has committed to an $800,000 cash payment to Gold Terrace and will issue 30 million MRC shares to increase its ownership in the mine by 39 per cent.

The company’s latest share price was 30 cents per share, up 1.69 per cent, as at 12:50pm AEDT.

The announcement comes with results from a definitive feasibility study for the Munglinup project, located approximately 105 kilometres west of Esperance.

The DFS has estimated an ore reserve of 4.24 million tonnes of high-purity graphite concentrate, with an average annual concentrate production of 52,000 tonnes per annum.

Initial capital costs are expected to be $US61 million, or approximately $A88 million (previously estimated at $A52 million), with a mine life of 14 years (previously nine years).

Average earnings before interest, tax, depreciation and amortisation is estimated to be $45 million per annum.

MRC chairman Mark Caruso said the acquisition was an important milestone in the development of the Munglinup graphite project.

“The DFS further enhances the company’s ambitions to build a global, vertically integrated carbon business based on two global strategic operating production centres in tier one jurisdictions, Australia and Norway,” Mr Caruso said in an ASX announcement.

The DFS was completed with support from Mondium, a joint venture between Lycopodium and Monadelphous, which was awarded a contract in March last year.

MRC said the DFS confirmed the Manglinup project would become a crucial asset in its ambition to supply graphite into high-demand battery anode markets.

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