Nextsource Materials reports positive feasibility study for Phase 2 expansion at Madagascar graphite mine

NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF) has reported affirmative results from an updated feasibility survey for a projected Phase 2 enlargement of its Molo Graphite Mine successful confederate Madagascar, outlining plans to summation accumulation capableness to 150,000 tonnes per twelvemonth of flake graphite ore implicit a 37-year excavation life.

The feasibility survey envisions a staged enlargement beyond the existing Phase 1 cognition done the operation of 3 caller 50,000-tonne-per-year processing modules successful 2 phases.

The enlargement is expected to necessitate superior expenditures of astir US$290.8 cardinal and make a pre-tax nett contiguous worth of US$402.5 million, based connected an 8% discount rate, with a pre-tax interior complaint of instrumentality of 21%.

According to the study, the modular operation attack is intended to trim physique time, improvement costs and execution risks compared with accepted excavation construction. The superior estimation includes mining equipment, modular fabrication, shipping, infrastructure, commissioning, contingencies and moving capital.

President and CEO Hanré Rossouw stated that the updated survey supports the company's strategy to grow the Molo Mine successful stages to conscionable anticipated request for flake graphite, peculiarly from the electrical conveyance artillery market.

"A staged enlargement of this magnitude volition presumption NextSource arsenic a large planetary supplier and underpins our vertical integration strategy to connection an ample and unafraid proviso of graphite flake and artillery anode material, enabling nonstop proviso to the electrical conveyance artillery market," Rossouw said successful a statement.  

"In addition, the staged attack acceptable retired successful the updated Feasibility Study reduces operating risk, lowers financing costs and accelerates gross portion providing flexibility to respond to marketplace demand."

The phased enlargement was developed based connected the company's offtake statement with Mitsubishi Chemical Group for graphite products from its planned artillery anode installation successful the United Arab Emirates, arsenic good arsenic ongoing discussions with automotive manufacturers and artillery anode partners regarding aboriginal demand.

NextSource noted that it has not yet made a accumulation determination for the archetypal signifier of the enlargement and that discussions with offtakers and imaginable strategical partners regarding the timing of the task stay ongoing.

The survey estimates a payback play of 7.2 years and projects life-of-mine mean operating costs of US$419 per tonne of ore astatine the excavation site, full currency costs of US$650 per tonne connected a free-on-board ground and an all-in sustaining outgo of US$665 per tonne. It assumes a life-of-mine weighted mean graphite ore selling terms of US$1,138 per tonne.