Eyre Peninsula project gets A$36m price tag

PERTH (miningweekly.com) – A scoping study into the Eyre Peninsula graphite project, in South Australia, has estimated a preproduction capital cost of A$36-million to develop a 11 592 t/y operation.

ASX-listed Archer Exploration told shareholders on Monday that production would increase to 18 648 t/y after year seven of operations, following a further A$25-million of capital investment to increase capacity from 140 000 t/y to 210 000 t/y.

The project is expected to have a mine life of some 17 years.

“The scoping study showed that the Eyre Peninsula graphite project is an exciting project which can generate strong returns for Archer shareholders,” said executive shareholder Greg English.

He noted that the project had the capacity to deliver a solid platform for the company from which to increase production rates and mine life, subject to the usual approval processes.

The scoping study estimated that the project would generate a net operating pre-tax cash flow of A$21.5-million a year, delivering a life-of-mine pre-tax net cash flow of A$366-million.

The project’s net present value was estimated at A$126-million and its internal rate of return at 62%.

“Based on these positive results from the scoping study, we plan to complete and lodge the mining lease application and finalise all other project approvals at the same time, with a view to Archer obtaining a granted mining lease in the middle of 2017.”