Volt Resources Releases Bunyu Graphite Feasibility Study

Volt Resources (ASX:VRC) has released a feasibility study for stage one development at its flagship Bunyu graphite project in Tanzania. 

The company’s key objective during phase one will be to establish infrastructure and its market position in preparation for an expansion that will come in stage two.

Stage one is based on a mining and processing plant throughput rate of 400,000 tonnes of ore per year, with the intention of producing an average of 23,700 tonnes per year of graphite products.

According to a press release from the company, project development approvals and funding initiatives for stage one are well underway, and first ore production is expected to take place 12 months into the development schedule.

The study anticipates an average free-on-board (FOB) operating cost of US$664 per tonne, with startup capital estimated at US$31.8 million. Stage one’s pre-tax NPV is US$18.6 million at a 10-percent discount, and its pre-tax IRR is 21 percent.

The payback period for stage one is pegged at 4.4 years, and total earnings before interest, tax, depreciation and amortization are set at US$93.6 million over the stage’s seven-year span.

Volt is currently finishing the final binding offtake agreements for stage one’s annual production, and a definitive feasibility study for stage two is lined up to happen simultaneously with stage one work.

Volt CEO Trevor Matthews discussed the completion of the feasibility study in a statement, explaining the company’s decision behind developing Bunyu through a two-stage process. “The stage 1 feasibility study is another important step forward in Volt’s plan to become one of the top three global producers of natural flake graphite,” he said.

“Following a detailed strategic review of product markets and financial markets, in May 2017 Volt announced a clear pathway to transition the company into a globally significant producer of material quantities of high quality graphite products. It was decided that this accelerated pathway would be achieved via the development of the Bunyu project over two stages,” Matthews added.

Volt’s Tanzanian subsidiary, Volt Graphite Tanzania, also completed several tasks during the feasibility study, such as completing the environmental and social impact study, lodging two mining license applications and completing a resettlement action plan.

At close of day on Tuesday (July 31), Volt’s share price was flat at AU$0.021.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.