Metals Australia (ASX: MLS) Advances Lac Carheil Graphite Project with Positive PFS

Highlights

• Metals Australia has completed the Prefeasibility Study for its Lac Carheil Graphite Project in Quebec, outlining a 24-year mine life and defined development pathway.
• The project targets average annual production of 101,241 tonnes of flake graphite concentrate grading 4% graphitic carbon , supported by a long-life production profile.
• The Prefeasibility Study estimates a pre-tax NPV of AUD 790.8 million , after-tax NPV of AUD 572.0 million , IRR of 0% , and a payback period of 4.2 years .
• The project is supported by a maiden Ore Reserve of 51 million tonnes at 11.14% Cg , reflecting an 86% conversion from indicated resources , within a broader 50 Mt mineral resource base.
• Total capital expenditure is estimated at USD 346.3 million , with potential tax credits reducing effective CAPEX to about USD 249.6 million .
• The project will now advance to the Final Feasibility Study, with metallurgical optimisation and environmental assessment work already underway.

Metals Australia Ltd (ASX:MLS), through its Canadian subsidiary Northern Resources Inc., has reached an important milestone at its Lac Carheil Graphite Project in Quebec, Canada, with the completion of a Prefeasibility Study. The study outlined the technical and economic framework for developing an open-pit graphite mine and flake graphite concentrate plant . The study highlighted a 24-year mine life and a defined production pathway for high-purity graphite concentrate. It also presented updated project economics, resource conversion results, and key development parameters, supporting progression to the next stage of feasibility evaluation .

Project Economics

The project is designed to produce an average of 101,241 tonnes per annum of flake graphite concentrate grading 95.4% graphitic carbon (Cg) over an initial 24-year mine life .

The Prefeasibility Study estimates a pre-tax Net Present Value (NPV @ 8%) of AUD 790.8 million (approximately USD 553 million) and an after-tax NPV of AUD 572.0 million (approximately USD 400 million). The project is expected to generate an Internal Rate of Return (IRR) of 22.0% , with a projected payback period of 4.2 years , indicating favourable project economics under the study assumptions.

Large Resource Base Supports Long Mine Life

The project is supported by a maiden Ore Reserve of 21.51 million tonnes at 11.14% Cg , containing approximately 2.40 million tonnes of graphite . This reflects an 86% conversion rate from indicated resources to reserves .

Total Mineral Resources stand at 50 million tonnes grading 10.2% Cg , containing approximately 5.1 million tonnes of graphite , including:

• Indicated Resources: 24.8 Mt @ 11.3% Cg (2.8 Mt contained graphite)
• Inferred Resources: 25.2 Mt @ 9.1% Cg (2.3 Mt contained graphite)

The Prefeasibility Study is based entirely on the higher-confidence indicated resource category, providing greater confidence in the production schedule and mine planning assumptions .

Estimated Capital Requirements and Infrastructure

Total capital expenditure is estimated at USD 346.3 million , including a USD 40 million contingency allowance . The breakdown includes:

• USD 273.1 million for concentrate plant and site infrastructure, including power supply
• USD 33.9 million for mining capital and site access road
• USD 17.3 million for tailings co-disposal facility (TCDF)
• USD 22 million for water management systems and treatment infrastructure

The project is also eligible for the Clean Technology Manufacturing Investment Tax Credit (CTM ITC) , potentially returning up to USD 96.7 million , reducing effective capital requirements to approximately USD 249.6 million .

Operating Costs and Efficiency Profile

Operating site costs are estimated at USD 473.90 per tonne of concentrate , while the all-in sustaining cost (AISC) is projected at USD 533 per tonne , inclusive of shipping and sustaining capital expenditure.

Pricing Assumptions and Revenue Model

Graphite pricing in the economic model is based on forecasts from Fast Markets covering the 2029–2050 period. The project is expected to produce three flake size concentrates with the following average pricing:

• Large Flake: USD 2,375/t
• Medium Flake: USD 1,829/t
• Fine Flake: USD 1,189/t

These assumptions highlight a weighted average price of approximately USD 1,385/t , which is positioned conservatively relative to peer Canadian graphite development projects.

Next Development Phase

Following completion of the Prefeasibility Study, Metals Australia plans to advance the project into the Final Feasibility stage . Current work programs include metallurgical test work to support feasibility design and site environmental survey programs required for the Environmental and Social Impact Assessment (ESIA) .

Why Investors May Be Watching

The Lac Carheil Prefeasibility Study outlines a long-life graphite development with defined production capacity, established reserve base, and detailed infrastructure planning. Supported by encouraging economic indicators, structured capital requirements, and ongoing feasibility work, the project is moving toward the next stage of evaluation. With natural graphite demand linked to lithium-ion battery supply chains and energy transition applications, progress through feasibility, permitting and financing could represent key milestones for Metals Australia as it advances Lac Carheil.

MLS shares traded at AUD 0.020 per share on 30 June 2026.