Date: Oct 30, 2018
New Energy Minerals (ASX: NXE) has started a fresh chapter this month with a page-turning scoping study as it aims for first production next year at its flagship Caula graphite and vanadium project in Mozambique.
Managing director Dr Bernard Olivier describes the study as phenomenal, thanks to the graphite component showing standalone, robust figures – then the revenue being doubled by effectively treating tailings for the vanadium content.
The study puts Caula’s pre-tax NPV at US$929.31 million with an internal rate of return of 78.3% for the two-phase, 26-year project.
The company plans to be in production from the phase one pilot plant at its 80%-owned project in the second half of 2019, due to the low US$7.4 million initial capex.
Importantly, despite one shareholder describing the company’s recent rebranding and share consolidation as being akin to an IPO, New Energy Minerals brings with it all the experience of operating in the region.
As Olivier points out, the company built a flotation plant 10 times the size of the planned pilot plant for its neighbouring ruby exploration project, which is being merged into TSXV-listed Fura Gems in a deal worth A$10 million so New Energy can focus on its sought-after graphite and vanadium.
“We’ve shown we can operate a mining project – even though it was bulk sampling for an exploration project – but it is the same principle of a flotation plant, and we’ve built it and we’ve run that very well in exactly the same area,” he said.
“That should give investors operational comfort because we know how to work with the community and how to operate in Mozambique.
“The scoping study underpins our belief in Caula and I believe it’s only a matter of time now before people focus on the graphite and vanadium story.”
Caula sits along strike from fellow ASX-listed Syrah Resources’ Balama graphite mine.
Olivier said aside from the scoping study’s remarkable financials, its standout feature was the company’s ability to go into production very quickly and start generating revenue in phase one.
The company only recently established a maiden vanadium resource at Caula, putting the entire 22 million tonnes at 0.37% vanadium pentoxide straight into the measured category. alt=’Plan view of vanadium and graphite mineralisation showing extent of measured resource and recently completed 4,000m drilling campaign, which is set to increase the resource base significantly’Plan view of vanadium and graphite mineralisation, showing extent of measured resource and recently completed 4,000m drilling campaign, which is set to increase the resource base significantly It also more than trebled its maiden graphite resource in July, updating it to 21.9Mt at 13.4% total graphitic carbon for 2.9Mt of contained graphite, all in the measured category.
“It’s very rare that there’s a large measured component in a scoping study but our entire vanadium and graphite resource is already in measured, which reflects our strategy that we are aiming to go into production,” Olivier said.
“What makes this really attractive is the 1:1 stripping ratio, it’s easy for us to develop an openpit and then have a small, robust pilot processing plant in place with the start-up capex around $7 million.”
