Magnis Resources’ Nachu Project Pre-Feasibility Study: NPV of US$1.04B with 84% IRR, USD $171.4 Million Capital Cost Estimate

Magnis Resources Ltd. (ASX:MNS) announced the pre-feasibility study (PFS) on the Nachu graphite project in Tanzania. This study only includes Blocks F and F South – which is 36% of the current total resource.

Highlights of the PFS study include:

• NPV of US$1.04B with 84% IRR
• Capital payback of 1.4 years with low sensitivity to capital costs
• Cash margin of over US$ 1,600 per tonne of product
• Capital cost estimate of US$171.4 million
• Operating cost estimate of US$448 per tonne for the first 3 years
• Cost improvement opportunities
• Board decision to proceed with development
• Discussions for financing progressing with overseas parties

Key Findings:

This study has only considered the mineralisation in Blocks F and F South (36% of current total resource), which are classified as Indicated or Measured categories as ore to be mined. Any material in Inferred Resource category, or resources in other blocks (D, B, J) that were defined in the November Resource statement (Reference 1) have not been considered. Key items from the PFS include:

• An after tax NPV of US$1,040 million, IRR of 84% (discount rate 10%) and a capital payback period of 1.4 years.
• 16 year project life based on Blocks F and FSL in Indicated and Measured categories.
• The Project’s design criteria, the capital cost estimate and the operating cost estimate were based on a project producing 180,000 tonnes of graphite concentrate per annum with an average ore grade of 5.1% graphite.
• The capital cost estimate of USD $171.4 million includes all processing facilities, infrastructure, dams, roads, owners’ costs, environmental and social costs needed to develop the Project from when the Board gives its final commitment.

Magnis Resources CEO, Dr. Frank Houllis, said:

With the recent announcements of our maiden JORC resource, our binding offtake agreements with SINOMA and Sinosteel (Reference 2 and 3) along with our metallurgical results, allows us to produce a product that is the best in the world, the Nachu Graphite Project is confirmed as world class and more importantly, its excellent financial credentials bode well for securing project funding in the near future.

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