09/10/2014 - 12:41

Study on Talga mine shows low capital costs

09/10/2014 - 12:41

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Shares in Perth-based minerals explorer Talga Resources surged after announcing it would cost $29 million to bring its Swedish graphite mine into production.

Study on Talga mine shows low capital costs

Shares in Perth-based minerals explorer Talga Resources surged it announced it would cost $29 million to bring its Swedish graphite mine into production.

Results from a scoping study on its Vittangi project suggested it contains the highest grade graphite deposit in the world.

The study, carried out by Snowden Mining Consultants, chalked up a potential open pit production target for the Nunasvaara deposit, contained within the Vittangi project, of 46,000 tonnes per annum graphite and about 1,200t/year of graphene over a 20-year mine life.

Described in the study as a ‘low risk investment’, it has been estimated to return capital to the company within 1.4 years.

It showed a net present value of about $490 million with average production costs hovering around $450 per tonne and current graphene pricing of $US55,000/t.

Talga managing director Mark Thompson said the project’s capital costs had been able to be minimised due to the smaller scale but high grade nature of the operation, along with the lack of any need for a primary crush/grind circuit.

The graphite mined from Nunasvaara will instead be treated at a nearby processing plant, where graphene, graphite and waste products can be liberated without any primary crushing, grinding or screening.

“We have been conservative in our scoping study estimates to ensure Vittangi is a high economic performer and robust enough to support a range of market circumstances, that it can be a viable stand-alone graphite operation,” Mr Thompson said.

“What we have is a viable project featuring low capital expenditure and operating costs with strong returns and a short payback period.

“We would expect its economic metrics to become even more robust as recoveries increase with future optimisation work.” 

Talga is in a permitting process to take Vittangi through to pilot plant production in 2015.

Talga's share price rose by 13.7 per cent to 45.5 cents per share at 12pm.

 

 

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