Feasibility study boosts Lincoln’s Kookaburra Gully graphite project prospects

JOHANNESBURG (miningweekly.com) – A feasibility study has found in favour of developing what is likely to be Australia’s only operating graphite mine when construction and commissioning work begins towards the second half of next year.

ASX-listed Lincoln Minerals on Monday announced the outcomes of the study, which focused on converting high-grade graphite deposits at the Kookaburra Gully project on South Australia’s Eyre Peninsula, into a modern-era openpit graphite mine.

The study found Kookaburra Gully – for which a state government-approved mineral lease is already in place – would be able to produce a range of high-quality, globally sought-after graphite products and that it would have room for further expansion beyond its initial ten-year mine life estimate.

The study had put a price tag of about A$44-million on developing the operation, which would have a processing rate of 250 000 t/y to produce 35 000 t/y of flake graphite concentrate at a metals recovery rate of 90%.

The study delivered a pre-tax net present value of A$81-million over the life-of-mine, and an internal rate of return of 33%, with a payback period of three to four years.

Kookaburra Gully has an estimated operating cost profile of A$395/t of concentrate in Year 1, increasing to A$700/y for the life-of-mine.

Lincoln reported that the project could expect to attract an average sales price of A$880/t to $1 350/t for standard mesh graphite products, including polymer/plastic additives, lubricants, drilling fluids, friction materials and other industrial uses.

Longer-term opportunities include sales into the high-growth lithium-ion battery market – value-add factors not included in the feasibility study results.

Metallurgical and pilot plant testwork confirmed Kookaburra Gully’s ability to efficiently produce high-grade graphite products up to purities of 98% total graphitic carbon.

Lincoln MD Dr John Parker said the outcomes of the study demonstrated a robust business case for the project.

The study also defined an upgraded graphite inventory, delivering a total probable ore reserve for Kookaburra Gully of 1.34-million tonnes at 14.6% TGC at a cutoff grade of 8.5% TGC inclusive of a total measured, indicated and inferred mineral resource of 2.03-million tonnes at 15.2% TGC.

Any new mine will have access to Lincoln’s adjoining and nearby graphite deposits, the historic Koppio graphite mine area, and a large area of mineralisation known as Kookaburra Extended.

As well as securing the mineral lease, Lincoln recently lodged with the South Australian government, the required Programme for Environment Protection and Rehabilitation (PEPR) application.

This sets out the management plans for the construction, operation, rehabilitation and closure of Kookaburra Gully and is a key final step for government approval to start project development and graphite mining at the site. The government’s response to this is expected before December 25.

Mining will be undertaken through conventional truck and shovel openpit mining methods, using the services of a mining contractor. It is expected the mine’s graphite concentrate will be packaged on-site into 25 kg packets or one-tonne bulk bags, loaded onto pallets or into 20-ft containers, then transported to Port Adelaide.

Lincoln has applied to the South Australian Future Jobs Fund to assist accelerate the mine’s development. The maximum amounts available under the fund are up to A$5-million in grant funding and up to A$10-million in loans.

The company is also assessing various value-adding processing options including spherical graphite production.

“There is no doubt that under the new findings and resource update, Kookaburra Gully is a world-class graphite deposit and is in an ideal position for a long-term operation to tap into the enormous growth forecast for graphite demand on the back of increased electrical vehicle and renewable energy battery sales and other high-tech uses,” Parker said.

“Opportunities for further along-strike exploration and development at both Koppio and Kookaburra Extended have the potential to extend the mine life beyond ten years,” he added.

“Completion of the Kookaburra Gully feasibility study, lodgment of the PEPR with local government, and successful completion by KPMG of the proposed mine’s business case, are the key catalysts to facilitate a positive credit assessment of the project by potential financiers.”