New WA graphite mine to cost $148m

Aspiring graphite miner Hexagon Resources has released a pre-feasibility study on its McIntosh project in the Kimberley, which detailed a development capex of $148 million.

Brisbane-based Hexagon released a pre-feasibility study on the graphite project this morning, which based a mining and ore processing rate of 2.4 million tonnes per annum to produce 88,000 tonnes a year of graphite concentrate over an initial seven-year mine life.

The study estimated operating costs of $1,038/t of concentrate sold and $42/t processed.

“We are taking a more assertive marketing approach than many of our peers in terms of impacting the graphite market,” Hexagon managing director Michael Rosenstreich said.

“We consider that the demand side for graphite, especially natural graphite, is significantly underestimated in current forecasts.

“A key market factor is the opportunity to displace more expensive synthetic graphite from the battery sector with consistent high-quality natural flake product.

“The McIntosh product, with high grade, purity and excellent electrical attributes with large scale production capacity from a stable jurisdiction, will generate unique marketing opportunities and strategic relationships.

“This is the basis for the company’s assertive scale of production which will also facilitate more opportunities for product diversification while maintaining a meaningful scale of production for our core customers.”

Hexagon hopes to complete a feasibility study on the project by the second quarter of 2018, with construction earmarked for the end of next year.

Hexagon shares were 3.4 per cent lower to 14 cents each at 10:20am.