Black Rock Mining BKT Graphite

Back in March, Black Rock Mining (ASX:BKT) released the results of an independent scoping study on the Mahenge graphite project which currently contains in excess of 131 million tonnes at 7.9% C (based on a cutoff grade of 4%. When using a cutoff grade of 9%, the project still contains 37.6 million tonnes at 10.2% TGC).

Black Rock Mining BKT Graphite mahenge 2

The initial capital expenditures are estimated at US$57.3M and depending on which production scenario the company will end up with, the cost per tonne of concentrate will be anywhere between $598/t (for the 31,000 tpy scenario) and $458/t (when reaching the optimal 52,000 tpy scenario). This mine plan is based on a throughput of 500,000 tonnes per year at a TGC of 10.5% (so this is higher than the average grade of the resource estimate). Using a sales price of $1236/t and a 25 year mine life, Black Rock estimates the project has an IRR of 62% and a NPV10% of $286M (but it’s unclear whether this is pre-tax or post-tax).

As the economics of the project are clearly better when using a higher production rate, Black Rock is also considering to increase the total output even further, but only if it makes sense from an economic point of view.

Go to Black Rock’s website
The author has no position in Black Rock Mining. Please read the disclaimer

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