Renascor Resources secures $185m loan facility from Australia’s Critical Minerals Facility scheme
Proceeds will be used to fast-track development and operation of the upstream graphite concentrate operation at the Siviour graphite project in South Australia
Advanced engineering designs for mineral processing plant being progressed
Discussions on potential binding offtake terms underway with existing non-binding offtake partners
Special Report: Renascor Resources’ Siviour graphite project in South Australia has been pinpointed as a critical investment for Australia’s bid to become a key cog in the green energy supply chain, $185m loan from the Australian Government’s Critical Minerals Facility.
Conditional approval for the loan under the $4b scheme shouldn’t be all too surprising given that Siviour is the largest reserve outside Africa of graphite, a key material in electric vehicles.
It boasts an impressive 16.8Mt at 8.2% total graphitic carbon for 1.4Mt contained graphite, a world class deposit which places its development firmly in the national interest.
This reserve alone could supply the market with 150,000tpa of graphite concentrate for the next 40 years according to Renascor Resources (ASX:RNU).
That fits perfectly into the company’s Battery Anode Material manufacturing plan, which will take that concentrate and turn it into 140,000tpa of battery-grade purified spherical graphite, a material used in the anodes of lithium-ion batteries.
According to the optimised BAM study completed in August 2023, the project will deliver post-tax unleveraged NPV of A$1.5 billion with a post-tax unleveraged IRR of 26%, and average annual EBITDA of A$363 million.
Gross operating costs are low at an estimated US$1,782 per tonne over the first 10 years and US$1,846 per tonne over 40-year mine life.
This includes a graphite concentrate operating cost of US$405 per tonne over first 10 years and US$472 per tonne over the LOM, which compares favourably with operating costs from existing commercial PSG operations (all of which are in China).
Renascor’s market data indicates those run at an average operating cost of approximately US$2,000 per tonne.
And RNU’s product will be “made in Australia” and with a minimal emissions footprint, adding to Siviour’s attractiveness.
Loan facility to fast-track upstream development
The $185m loan facility has been approved by Export Finance Australia to fast-track development and operation of the upstream graphite concentrate operation.
EFA has also been progressing due diligence on the upstream graphite concentrate operations, with aspects of due diligence – including technical – completed with no fatal flaws identified.
In preparation for the design, procurement and construction of the graphite concentrate operation, RNU is currently progressing advanced engineering designs for the mineral processing plant and non-process infrastructure and concurrently discussing potential binding offtake terms with existing non-binding offtake partners, as well as other battery-anode market participants.
“We are delighted to have received confirmation that the A$185 million conditionally approved loan from the Critical Mineral Facility is approved to support our strategy of fast-tracking the construction of the upstream portion of the BAM Project,” managing director David Christensen said.
“Our phased development strategy provides us with an early-mover advantage by entering the market with reliable supply of natural graphite concentrates from Australia, an IRA-aligned jurisdiction.
“The strategy allows us to generate early cashflows, accelerate production of graphite concentrates, continue to build valuable offtake relationships with leading anode suppliers, operate and optimise the PSG pilot plant and PSG product qualification, and de-risk the subsequent development of the downstream PSG processing facility.
“In the Siviour graphite deposit, Renascor is fortunate to be endowed with a large world class asset. The support from the Australian Government and EFA is testament to the gravity of the opportunity for Renascor, and Australia, to become a world-leading supplier of graphite into the Lithium-ion battery supply chain.”
This article was developed in collaboration with Renascor Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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