Alabama Graphite Announces Positive PEA for Coosa Graphite Project

Alabama Graphite Corp. (TSXV:ALP,OTCQX:ABGPF) announced the results of a positive Preliminary Economic Assessment for its 100%-owned flagship Coosa Graphite Project located in east-central Alabama, USA.
As quoted in the press release:

The PEA confirms Coosa as a project with low capital intensity and attractive potential returns;

• PEA is based on Coosa producing two finished (final) specialty, secondary-processed graphite products — a coated spherical graphite product (“CSPG”) and a purified micronized flake graphite product (“PMG”). The PEA is not modelled on producing a final run-of-mine (“ROM”) graphite concentrate product typical of other conventional flake graphite projects;
• Initial Capital Expenditure (“CAPEX”) of $43.2 million, with a payback period of 1.9 years (pre-tax) and 2 years (post-tax) from commencement of commercial production;
• Base-case pre-tax Net Present Value (“NPV”) of $444 million, post-tax NPV $320 million (8% discount); pre-tax NPV of $329 million, post-tax NPV of $236 million (10% discount);
• Pre-tax Internal Rate of Return (“IRR”) of 52.2%; post-tax IRR of 45.7%;
• Base-case pre-tax annual cash flow of $67.5 million; post-tax annual cash flow of $49.7 million;
• Life of Mine Gross Revenue (less royalty) of $2.4 billion;
• Life of Mine Operating Expenses (“OPEX”) of $533 million;
• Life of Mine plan of 27 years based on mining ~10% of Mineral Resource Estimate; mining is occurring within the Oxide Zone (the PEA is based on milling 15.2 million tons — 12.6 million tons @ 2.85% Cg of the Indicated Resource and 2.6 million tons @ 2.95% Cg of Inferred Resource — of the Coosa Graphite Project’s 78.5 million-ton Indicated and 79.4 million-ton Inferred Mineral Resource Estimate);
• Surface mining operation; low Waste-to-Ore stripping ratio of 0.11:1;
• Primary and secondary processing plants to produce 5,500 tons (5,000 tonnes) of specialty high-purity graphite products annually, ramping up to 16,500 tons (15,000 tonnes) annually in year 7; subsequent capital expenditures to be funded through free cash flow;
• PEA is based on selling two specialty, high-value high-purity graphite products — CSPG (75% of planned production) and PMG (25% of planned production);
  Selling price for CSPG at $8,165 per ton ($9,000 per tonne) and PMG at $1,814 per ton ($2,000 per tonne) for a blended selling price of $6,577 per ton ($7,250 per tonne);
• Life of Mine average cash operating costs of $1,410 per ton ($1,555 per tonne) for final product of CSPG and PMG.

Alabama Graphite  Co-Chief Executive Officer and Executive Director, Donald Baxter, stated:

Today marks the most significant milestone in AGC’s history. The PEA signals a new era and a new strategic direction for the Company and its shareholders as AGC advances the Coosa Graphite Project. We are very pleased with the excellent results of the PEA, which indicate a low-cost project with excellent potential economics. Our senior management and technical team have more than a century of combined graphite mining, graphite processing, graphite purification, specialty graphite products and applications, and graphite marketing and sales experience — and with our partners at AGP Mining Consultants and Metal Mining Consultants — we have delivered a technically sound, realistic and potentially highly profitable project.”
The PEA demonstrates that the Coosa Graphite Project holds the potential to become a reliable, long-term U.S. supplier of specialty high-purity graphite products. Further, the products AGC is planning to produce are targeted to address what clean-tech and green-energy customers actually want and need; products that are in high demand, and command the highest prices in the flake graphite space, with historically inelastic pricing. Our mine-to-green-energy-markets business strategy is simple — we intend to supply American graphite for the growing American green-energy industry,” said Mr. Baxter. “We look forward to commencing with the Feasibility Study and bringing this exceptional American asset into production.

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