The Kent Town-based Renascor Resources Limited (ASX: RNU) explores and evaluates mineral properties in Australia including uranium, graphite, gold, copper, and other deposits. Currently, the company’s primary focus lies in developing the Siviour graphite project situated in Eyre Peninsula, South Australia.
On March 4th, 2019, Renascor Resources announced the appointment of BurnVoir Corporate Finance as the financial advisor to organise financing for the development of its 100%-owned flagship Siviour graphite project. As per the deal, BurnVoir will work in collaboration with Renascor and its strategic partner Royal IHC to secure financing for the project that is designed to maximise value for the shareholders.
BurnVoir Corporate Finance is an independent public investment and advisory firm with infrastructure sector in Australia. It has prior expertise in organising funding for high-quality projects. Meanwhile, Renascor will implement the Definitive Feasibility Study and progress with offtake negotiations.
Prior to this, Renascor had released the results of the Prefeasibility Study (PFS), which for a spherical graphite production operation using graphite concentrates to be produced from the Siviour Graphite Project.
As per the company,at the backdrop of strong demand for lithium-ion batteries and the recent hike in graphite prices, the project economics are compelling with high future returns.
According to the projections, the inclusion of spherical graphite in a combined operation with graphite concentrates would result in a post-tax unleveraged NPV of AUD 889 million and IRR of 53%. Besides, the operating cost for the spherical graphite is estimated at AUD 1,883 per tonne (net of projected by-product credits), versus an expected spherical graphite selling price of AUD 4,800 per tonne.
In the quarter ended December 31st, 2019, the company also accomplished additional works in obtaining approvals to commence drilling and other exploration tasks at the wholly-owned Farina and Olary projects in South Australia. The results of the drill program under the Definitive Feasibility Study (DFS) for the Siviour graphite project, which is expected to be completed in early 2Q 2019, were also announced during the period confirming the continuity of high-grade graphite within the Siviour Indicated Resource over closed-space intervals and several future opportunities to expand the size of the initial mining pits and provide further efficiencies in mine scheduling, with considerable estimated cost savings.
Following this, the company entered into a Strategic Partnership Agreement with international Engineering, Procurement and Construction (EPC) contractor, Royal IHC Australia (Royal IHC) that would work in collaboration with the Brisbane-based engineering firm Wave International and Renascor deliver the Siviour Definitive Feasibility Study.
At the end of the quarter, the company had a net cash and cash equivalents at AUD 5.18 million with significant outflows of AUD 1.44 million from the operating activities resulting from payments for exploration, evaluation and corporate costs. Besides, the company estimates the net cash outflows for the next quarter to be AUD 2.42 million.
Renascor Resources has a market cap of AUD 19.61 million with approximately 1.15 billion outstanding shares. With the close of the market session on March 4th, the RNU stock last traded at a sell-off price of AUD 0.017, without any intra-day changes.
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