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Summary
- Renascor’s core asset Siviour hosts one of the world’s largest graphite resources, with DFS confirming lowest quartile projected OPEX.
- Renascor is developing a vertically integrated operation, combining a mine and concentrator with a downstream operation for Purified Spherical Graphite (PSG) production, eyeing to tap the high-growth opportunities in the market.
- Via integrating PSG processing with Siviour Project, Renascor would foster the world’s first in-country mine and battery anode material operation outside China, ensuring PSG supply chain security.
- Results from recent battery anode material study by RNU and independent tests conducted by German graphite specialist ProGraphite back the PSG processing plans.
Australian mineral developer, Renascor Resources Limited (ASX:RNU) with a portfolio of assets in South Australia’s key mineral districts appears highly driven towards the development of its core asset, Siviour Graphite Project, into a world-class graphite mining operation. The project is expected to unlock high-growth capabilities, allowing the Company to leverage the market prospects by virtue of its vast resource base and compelling project economics.
The potential of integrating a PSG processing with Siviour Graphite Project has been backed by robust study results, stimulating the Company’s efforts towards the development of the world’s first integrated, in-country mine and battery anode material operation beyond the frontiers of China. The projected robust uptake of electric vehicles catalyses Renascor’s lucrative development plans for its flagship project in the buoyant graphite marketplace.
Moreover, results from independent tests undertaken by German graphite specialist ProGraphite GmbH have confirmed the ability to process Siviour’s graphite into battery-grade PSG. The independent purification tests further support the goal of Renascor to become a major PSG source for lithium-ion battery anode makers via corroborating its eco-friendly purification process that meets sustainability requirements of financiers and end-users.
ALSO READ: Renascor Resources on Right Path to Become the World’s First PSG Producer Outside China
At the same time, Renascor appears to be strategically guided by its critical financial undertakings. Notably, Renascor engaged with a leading Nordic investment bank, ABG Sundal Collie for managing the proposed debt financing for the integrated Siviour Graphite Concentrate and PSG Project. The Company has also received a Letter of Support from the Australian Government’s official export credit agency, Export Finance Australia (EFA) for the provision of finance. Moreover, it has received a Letter of Interest from the official ECA of the Dutch Government, Atradius Dutch State Business, for up to ~60% of start-up capital requirement for Siviour Graphite Concentrate Project.
With this backdrop, let us explore Siviour Project and the proposed PSG integration by Renascor Resources.
Siviour Graphite Concentrate Project
Ore Body and Infrastructure
Siviour Graphite Project is a low-cost, world-class graphite asset, hosting one of the largest graphite resources, globally. The scale-grade and near-surface of Siviour orebody having flat-lying orientation highlights the potential for production of high-quality graphite products at a low cost over long-term mine life.
The project residing in mining-friendly South Australia’s Eyre Peninsula enjoys close proximity to relevant infrastructure. The prime location of the project in coastal South Australia in the vicinity of established infrastructure extends capital cost savings. It reduces the delivery risk of the project by drawing on skilled mining workforce of Australia.
The project is well-advanced into the approval process with a mineral lease granted by the South Australian Minister for Energy and Mining and extensive environmental review completed.
Highly Positive DFS Reinforcing Siviour Project’s Bankability
Results of the Siviour Definitive Feasibility Study (DFS) for graphite concentrate production confirmed Siviour’s globally competitive economics. Siviour’s shallow, horizontal orientation of a single massive ore body offer one of the lowest projected operating costs of any graphite mine in the world.
Siviour’s Purified Spherical Graphite Operation
Siviour’s unique potential is further strengthened by Renascor’s plan to integrate the graphite concentrate operation with a downstream PSG processing operation. By producing the downstream PSG product, Renascor aims to be the first in-country vertically integrated PSG producer outside of China and therefore offer lithium-ion battery makers diversity of supply from from China, which currently controls 100% of PSG processing.
Site Advantage for PSG Production
The battery anode material operation would have a manufacturing plant of PSG located near Port Adelaide at an industrial site. The infrastructure availability involving an industrial precinct offers road access along with the ready availability of necessary supplies such as electricity and water, aiding in the reduction of capital requirements.
The operations, owing to presence in an industrial precinct, permit the commissioning and operation of the proposed plant. Meanwhile, more limited risk of issues connected with water contamination, heritage protection and other community standards is also offered by the site.
Transport costs are minimised via limiting movement along the planned mine-to-port transport route for the Siviour graphite concentrates. The Company expects relative cost-savings through avoidance of additional transport and logistic costs, as like other potential PSG operations, it does not propose exporting graphite concentrates to third-countries for processing.
Spherical Graphite Test Work
Renascor has undertaken three years of PSG test work, which encompasses micronisation, spheronisation and purification tests, to evaluate Siviour Graphite Concentrates. This work has confirmed the Siviour’s ability to be processed into high-purity PSG conforming to industry specifications for the lithium-ion battery anode market.
Renascor has undertaken additional test programs utilising uncoated PSG from Siviour for producing lithium-ion battery anodes, assessing the viability of its incorporation. The initial test results validate the fulfilment of several key performance criteria by Siviour spherical graphite for lithium-ion battery anodes, including formation behaviour, charge/discharge, and durability.
Recent independent purification tests undertaken by ProGraphite have confirmed the ability to process Siviour graphite into high-value battery-grade PSG, 99.97% carbon PSG using an environmentally caustic roast purification technique that avoids the use of hydrofluoric acid (the method often used in China).
Battery Anode Material Study Results
The Battery Anode Material Study, which evaluated the integration of a PSG processing operation with Renascor’s Siviour Graphite Project, highlighted significant value addition, offering Renascor the way to plug into PSG end-users seeking supply chain security outside China.
The globally competitive gross operating cost of US$1,989 per tonne of PSG in conjugation with planned PSG production averaging around 28,000 tonnes per annum is expected to aid the Company in advancing ongoing finance and offtake discussions. Furthermore, environmentally friendly chemical purification during PSG production by avoiding the hydrofluoric acid usage satisfies sustainability requirements of end-users and potential financiers.
What’s Next?
On 21 July 2020, RNU closed the day’s trading at AU$ 0.013, moving upward by 8.333% from its previous close. Its stock has delivered a return of more than 20% and 100% in the last one-month and three-month period, respectively.
