Northern Graphite Corporation says the results of a preliminary economic assessment (PEA) examining the relocation of its processing plant from Okorusu to the Okanjande mine show attractive economics.
The relocation plan is also part of the company’s bid to boost production to 150,000 tonnes, up from the current 30,000 tonnes per year.
The PEA findings show that the new plan maintains attractive economics despite higher capital costs and lower operating costs.
According to Northern Chief Executive Officer Hugues Jacquemin, the “strategic move” would also enhance sustainability.
“The decision aligns with the strategy to become a competitive supplier in the battery anode material markets. This PEA supports our strategy to develop Okanjande as a competitive asset that can be available to meet the demands of our customers in years to come,” said Jacquemin.
He added that the new mining plan at Okanjande will allow Northern Graphite to move quickly to serve the fast-growing market for battery anode materials and increase the ability to expand the facilities over time.
“The ability to add 31,000tpy of production at a very reasonable capital cost creates a compelling case for the development of Okanjande. Okanjande has a very large resource located in one of the most politically stable countries in Africa, with easy access to a deep-water port which provides substantial competitive advantages over most other African projects,” said Jacquemin.
The PEA, issued July 31, 2023, was prepared by CREO Engineering Solutions and confirms the viability of moving milling operations directly to the Okanjande mine site, which eliminates the cost of trucking mineralized material 70 km to Okorusu.
Northern Chief Operating Officer Kirsty Liddicoat explained that the existing plant had limitations in terms of space for expansion
In contrast, she said Okanjande offers ample space for future growth, allowing Northern Graphite to meet increasing demand in a more streamlined manner.
“This expansion potential is critical as we strive to boost production from the current 31,000 tonnes annually to 150,000 tonnes, a necessary contribution to the energy transition. Moving the mill also provides room for potential future expansion from the perspective of both processing and tailings capacity, which is something we do not have at the current location,” said Liddicoat.
The new approach also incorporates dry tailings into an integrated waste landform which means less water use and a more sustainable operation in support of the green transition, she added.
The company is also looking at other ways to reduce its carbon footprint after the plant move, including the use of electric pit equipment and purchasing biofuel offsets on shipping concentrates from Namibia.
The Okanjande/Okorusu operation is currently on care and maintenance and the goal remains to restart production in late 2024, subject to financing.
The firm is banking on the Okanjande graphite mine to remain a key catalyst in its strategy to become an integrated and sustainable mine-to-battery company, supplying markets in North America and Europe.
The company said graphite from Okanjande will also supply traditional markets, from refractory bricks for steelmaking to heat management in consumer electronics, to friction and lubrication products for the global automobile industry.
This comes as Northern Graphite Corporation acquired the mine from Imerys Group and its joint venture partner for N$286 million (US$15.8 million) in cash.
Additionally, the Canadian miner paid N$42.4 million (EUR2.2 million) in lease payments for the use of land and buildings.
The acquisition was financed through N$653 million (US$36 million) in debt, royalty and stream financing provided by funds managed by Sprott Resource Streaming and Royalty Corp.
Northern Graphite originally intended to invest approximately N$254 million (US$14 million) to build a new tailings facility and modify the Okorusu processing plant to increase throughput and recovery and improve flake size distribution.
