Energy Materials for Tomorrow Falcon Announces Positive Results of Preliminary Economic Assessment for Integrated Development Plan to Produce Anode Material
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Falcon Announces Positive Results of Preliminary Economic
Assessment for Integrated Development Plan to Produce Anode Material
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Combined After-Tax NPV8% of US$1,321 Million and
IRR of 43% over 25 years
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Initial Capital Costs of US$185 Million for Lola Graphite Project and
US$73 Million for Morocco Anode Plant
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Preliminary Economic Assessment for Integrated Development Plan
Replaces November 12, 2024 Press Release
PRESS RELEASE FOR IMMEDIATE RELEASE
Abu Dhabi, United Arab Emirates, December 23, 2024 – Falcon Energy Materials plc (TSX-V:
FLCN) (“ Falcon” or the “ Company”) today announces the positive results of the Preliminary
Economic Assessment (“PEA”) for the integrated development plan (“ IDP”), consisting of the Lola
Graphite Project (the “ Mine”) in the Republic of Guinea (“ Guinea”) and a natural graphite
spheroidization, purification and coating plant (the “Anode Plant ”, view the video HERE) in the
Kingdom of Morocco (“Morocco”). The PEA, prepared by Dorfner Anzaplan UK Limited (“Anzaplan”),
showcases the financial and operational potential of Falcon’s vision to become a vertically integrated
producer of coated, spheroidized and purified graphite (“ CSPG”) anode material at industry leading
operating costs.
Falcon issued a press release on November 12, 2024 (the “ November 12 Release”) which
announced positive results from a preliminary economic assessment for the Anode Plant. Following
a review by the Autorité des marchés financiers , the Company clarifies that the terms “preliminary
economic assessment” and “feasibility study” referred to in the November 12 Release are not the
same as those associated with mineral projects as defined under National Instrument 43-101 –
Standards of Disclosure for Mineral Projects (“NI 43-101”) because the Anode Plant, considered on
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a stand-alone basis, is not a mineral project but rather an industrial project and thus not governed by
NI 43-101. As a result, the Company retracts the November 12 Release, which related exclusively to
the assessment of the Anode Plant, and replaces it with this press release which discloses the PEA
for an integrated mineral project consisting of the Mine (Phase I) and the Anode Plant (Phase II).
Highlights and Key Assumptions of the Integrated Development Plan Preliminary Economic
Assessment include:
▪ After-tax net present value (“NPV”) at a real 8% discount rate of US$1,321 million;
▪ After-tax internal rate of return (“IRR”) of 43%;
▪ Phase I Mine pre-production initial capital costs, including contingency, estimated at US$185
million;
▪ Phase II Anode Plant pre-production initial capital costs, including contingency, estimated at
US$73 million1;
▪ Anode Plant average operating costs of US$3,193 per tonne of CSPG;
▪ Mine average direct operating costs of US$616 per tonne of concentrate; and
▪ Average saleable production of 26,000 tonnes CSPG per annum (“tpa”) and 18,000tpa fines
from the Anode Plant alongside 42,000tpa of coarse flakes from the Mine.
Matthieu Bos, Chief Executive Officer of Falcon, commented “The robust PEA results affirm Falcon’s
strategic vision and dedication to closing critical gaps in the battery materials supply chain. We’re
poised to advance as a key , vertically integrated, CSPG supplier to Western markets, ensuring a
reliable source of high-quality, sustainable battery materials.’’
Leveraging Advanced Technology and Procurement with Hensen Partnership
The Anode Plant in Morocco will feature Falcon’s integrated mine-to-market strategy, backed by a
strategic partnership with Hensen Graphite & Carbon Corp oration (“Hensen”). Hensen, a leading
CSPG producer , brings years of operational expertise from its successful synthetic and natural
graphite anode plants in China. Hensen is currently building a large -scale anode plant in Weihai,
China (the “ Weihai Plant ”), commissioned in Q4 2024. Hensen and Falcon have leveraged the
proven design, procurement and existing supply chain practices from Hensen’s recently completed
Weihai Plant to establish a highly competitive, cutting-edge facility in Morocco. The partnership allows
Falcon to implement advanced technology and process efficiency to deliver high quality anode
materials at scale and with competitive costs to the rapidly growing European and North American
markets.
“With the Hensen partnership and redomiciliation to Abu Dhabi, we have created a unique platform,
headquartered in the UAE with a listing on the TSX Venture Exchange, while maintaining an open
1 Phase II Anode Plant pre -production initial capital costs (US$73 million) does not include the capital required to expand
the coating plant (US$33 million), which is deferred until after full product qualification.
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mind to additional partnerships with industry leaders in China,” Mr. Bos continued. “Falcon’s strategy
and structure are truly unique and cannot be replicated by anyone in the short to medium term. The
very complicated nature of the CSPG supply chain, which is almost entirely dominated by China,
makes partnerships with long-standing anode material producers a critical pathway to success.”
Integrated Development Plan Flow Sheet
The PEA contemplates the development of a large high-purity graphite mine and concentrator in
Guinea and a value-added CSPG conversion facility in Morocco. Falcon’s Anode Plant envisages the
construction of three distinct production lines, using established and proven Hensen technology and
design, focusing on the key steps to produce CSPG. The IDP flow sheet includes:
• Phase I: Guinea Mine and Concentrator : Low strip ratio, open pit mine followed by
conventional crusher, concentrator, floatation, dewatering and screening circuit to produce a
graphite concentrate (the “Concentrate”);
• Phase II: Morocco Spheroidization Plant: Employing the latest, innovative processes to
shape the graphite flakes into spheres, increasing the surface area density and energy
density, to produce spherical graphite (“SG”);
• Phase II: Morocco Purification Plant: Employing hydrofluoric acid alongside hydrochloric
and nitric acid to remove impurities, producing >99.95% spherical purified graphite (“SPG”);
and
• Phase II: Morocco Coating Plant: Applying an amorphous carbon (pitch tar) coating on the
SPG surface to enhance energy density and increase battery safety and longevity, producing
coated SPG (“CSPG”).
Location and Infrastructure
The 100%-owned Lola Graphite Project is located in Guinea, close to the border with Liberia. The
Concentrate is expected to be exported by road through the port of Monrovia in Liberia. It is anticipated
that all Concentrate that is suitable for conversion in the Anode Plant will be shipped directly by sea
from Libera to Morocco, while the remaining Concentrate will be sold worldwide. The Anode Plant,
which requires approximately 8 hectares of land, is strategically located in Morocco on the African
continent, benefiting from access to critical port and energy infrastructure and free trade agreements
with both the United States and the European Union.
Lola Graphite Project Resource Statement
The resource estimate was established using data from boreholes drilled and sampled up to
December 1, 2018. The total resource estimate of the Lola Graphite Project, as disclosed in the
“Updated Feasibility Study” for the Lola Graphite Project with an effective date of February 27, 2023
and a report date of April 7, 2023 and available on SEDAR+ at www.sedarplus.ca (the "Lola FS”),
includes Measured and Indicated Resources of 54.0 Mt grading 3.98% Cg, and Inferred Resources
of 12.3 Mt grading 3.6% Cg. The resource estimate has been prepared using a cut-off grade of 1.0%
Cg for oxides and 1.4% Cg for fresh rock. The PEA for the IDP does not incorporate or include Mineral
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Reserves disclosed in the Lola FS. Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
Table 1: Lola Graphite Project Resource Statement
Category Tonnage (Mt) Grade (% Cg) Contained Cg (kt)
Measured Resources 8.26 4.04 333.6
Indicated Resources 45.70 3.97 1,812.0
Total M&I Resources 53.96 3.98 2,145.6
Inferred Resources 12.30 3.60 442.5
1. Mineral Resources has been estimated by the Resources QP.
2. The Mineral Resources are reported in accordance with the CIM Standards on Mineral Resources and Reserves,
Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM
Council.
3. Resources are constrained by a Pseudoflow optimised pit shell using HxGn MinePlan software.
4. Pit shell was developed using a 34 -degree pit slope in oxide and 42 -degree pit slope in fresh rock, concentrate sales
price of US$1,389/t concentrate, mining costs of US$2.75/t oxide, US$3.25/t fresh rock, processing costs of US$10.25/t
oxide and US$15.18 /t fresh rock processed, G&A cost of US$1.52/t processed and transportation costs of US$50/t
concentrate, 84.2% process recovery and 95.4% concentrate grade and an assumed 100,000 tpa concentrate
production.
5. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability. The Mineral
Resources estimate may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical,
marketing, or other relevant issues. There is no certainty that Mineral Resources will be converted to Mineral Reserves.
6. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral
Resource and cannot be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred
Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
7. Contained graphite without mining loss, dilution, and processing recovery (In-situ).
8. The effective date of the estimate is February 27, 2023.
9. The open pit Mineral Resources are estimated using a cut-off grade of 1.0 % Cg oxide and 1.4% Cg fresh rock.
Totals may not add due to rounding.
Phase I: Guinea Mine and Concentrator
The Company anticipates using a contract -mining operation to mine approximately 2.5Mtpa of
material and 2.3Mtpa of waste in a conventional drill-and-blast mining operation over a 25-year period.
The resulting average feed-grade to the processing facility is 3.91% Cg.
The mineral processing plant consists of a crushing area and a concentrator where material
beneficiation and concentrate dewatering, screening, and packaging takes place. The process
flowsheet includes crushing, grinding, rougher flotation, polishing, and cleaner flotation. The back end
of the concentrator includes tailings thickening, concentrate filtration and drying, dry screening and
bagging of graphite products, and ma terial handling. All the tailings from the concentrator will be
thickened and pumped to the lined tailings ponds. The graphite concentrate , which has a target
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concentrate grade of >94% Cg, will be recovered by a conventional flotation process at an overall
recovery over the life of mine of 83.6%. Over the life of the mine, the processing plant is expected to
produce graphite concentrate divided into four standard -size fractions: +48 mesh, -48+80 mesh, -
80+100 mesh and -100 mesh. The -100 mesh portion of the production will be used as feedstock for
the Anode Plant.
Figure 1: Illustration of Falcon’s Concentrator
Phase II: Morocco Spheroidization Plant
The 45,000tpa spheroidization plant consists of three separate process steps: micronization,
spheroidization of the micronized graphite to produce coarse primary SG, and secondary
spheroidization to produce a fine secondary SG product. The overall yield of the spheroidization plant
is 60% resulting in 27,000tpa of SG. The micronization and spheroidization process is designed to
produce spherical particles of a size of 20 microns ( categorized as “SG20”) and 10 microns
(categorized as “SG10”). SG20, representing 86.7% of the feed, is collected into a main collector and
sent to the purification plant by pneumatic transportation. SG10 is collected and sent to secondary
spheroidization circuit, which contains additional spheroidizers. SG10, represent ing 13.3% of the
feed, is collected into a main collector and sent to a separate circuit in the purification plant by
pneumatic transportation, while the remaining fines by -product particles are sent directly to the
bagging station and sold separately.
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Figure 2: Illustration of Falcon’s Morocco Anode Plant
Phase II: Morocco Purification Plant
The 27,000tpa purification plant consists of a chemical treatment to increase the purity of the SG from
94.6% to 99.95% and SPG. The purification plant consists of four separate process steps: a thermally
induced chemical reaction, pressure filtration, washing, and drying. The SG is washed with a mixture
of hydrofluoric acid, hydrochloric acid, nitric acid (the “ Key Acids”) and steam to remove the main
impurities (e.g., SiO2, Al2O3, MgO, Fe2O3, and CaO). Following the purification step the Key Acids are
recovered in a filter press and reused. Finally, the SPG is washed to remove water-soluble impurities
generated during the reaction and dried to reduce the moisture content below 1%.
Phase II: Morocco Coating Plant
The coating process is the final step of the CSPG production process. The objective of this step is to
coat particles with a thin film of carbon precursor (3-25 nanometres thick), which is then crystallized.
This involves milling pitch tar (10% wt.), mixing the milled pitch tar with SPG, and thermally treating
the mixture in a coating furnace. The coating furnace lines are dedicated to coat primary SP20 and
SP10, separately. The cooled CSPG is deagglomerated, demagnetized, sieved and bagged to ensure
the final product meets stringent end-user specifications. The coating line is initially built with a 5ktpa
capacity and expanded to 26ktpa following end-user qualification of the CSPG.
Note: 1. Spheroidization plant; 2. Purification plant; 3. Coating plant; 4. Finishing plant ; 5. Acid storage; 6. Water purification.
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Figure 3: Illustration of Falcon’s Coating Plant
Phase II: Morocco Gas and Water Treatment
The Anode Plant contains gas and water treatment systems. The gas scrubber cleans the off-gasses
from the purification and coating plant. A hydrated lime solution is fed into the scrubber to capture
residual gas, and the purge is sent to the lime scrubber buffer tank. The clean gas is sent to a stack
and released in the atmosphere. The water purification plant, which predominantly treats the effluents
of the purification plant, has a capacity for 1,200 m 3 / day. All waste water will be tested before
discharge to the local sewage system and will meet Moroccan discharge limits.
The Anode Plant footprint and buildings are designed such that production can be doubled by adding
additional spheroidization, purification and coating lines without erecting new buildings. Additionally,
the plant includes advanced gas and water treatment systems, ensuring compliance with local
environmental standards. Tanger Med Engineering SA (“TME”) is currently completing a preliminary
environment impact analysis of the Anode Plant.
Phase I and Phase II Capital and Operating Costs
The projected capital and operating costs for the project are presented below in Table 2 and 3. The
capital and operational costs are estimated based on the actual costs of the Hensen Weihai Plant,
adjusted for transport to and construction in Morocco. Estimations were performed in accordance with
the Association for the Advancement of Cost Engineering (‘‘AACE’’) Class 5, Recommended Practice
47R-11, with typical variation in low and high accuracy ranges of -20% to -50% and +30% to +100%,
respectively.
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Table 2: Capital Costs
Capital Costs
Phase I: Mine and Concentrator
Mining $8M
Process Plant $62M
Tailings & Water Management $4M
Site Infrastructure $11M
Power Plant & Distribution $36M
Preliminary & General $16M
Mine Total Direct Costs $136M
Indirect $25M
Owners $6M
Contingency $17M
Mine Total Costs $185M