Northern Graphite Completes Preliminary Economic Assessment on Restart of Namibian Operations Okanjande/Okorusu on Track for Production by Mid 2023
Northern Graphite Completes Preliminary
Economic Assessment on Restart of Namibian
Operations
Okanjande/Okorusu on Track for Production by Mid 2023
Ottawa, Ontario--(Newsfile Corp. - July 11, 2022) - Northern Graphite Corporation
(TSXV: NGC)
(OTCQB: NGPHF) (FSE: ONG) (XSTU: ONG)
(the "Company" or "
Northern
") is pleased to announce
the completion of a Preliminary Economic Assessment ("PEA") for the restart of its Okanjande/Okorusu
graphite operation in Namibia. The report, which will be filed on Sedar shortly, concludes that Northern
can bring the project back into production by mid 2023 at an average production level of almost 31,000
tonnes per annum of graphite concentrate with a C1 production cost of US$775/tonne. The capital
required to initiate production is US$15.1M which includes the installation of a new, two-stage grinding
circuit, additional regrind equipment in the flotation plant, and a new tailings storage facility.
The PEA indicates very robust project economics as reflected in Table 1, with a Post Tax IRR of 62%, a
Post Tax NPV of US$65M, and a payback of under 2 years based on a 10 year project life and a
weighted average graphite price of US$1,500/tonne.
The graphite price is based on a concentrate
containing11% +50 mesh XL flake, 48% +80 mesh large flake, 24% +100 mesh medium flake and 16%
+150 mesh small flake, and having an average carbon content of 96%.
Project KPIs
UOM
Value
Measured and Indicated Resource - Weathered
Mt, %TGC
5.9Mt @ 4.21% TGC
Measured and Indicated Resource - Fresh
Mt, %TGC
1.2Mt @ 4.35% TGC
Ore processed
tonnes
6,096,650
Average grade
%
5.3
Average recovery
%
92
Average annual concentrate production
tonnes
30,760
Waste to ore ratio
NA
0.7
Post Tax NPV @8% CoC
US$
65,058,495
Post Tax IRR
%
62%
Post Tax and Royalty Undiscounted Cashflow
US$
120,732,276
Post Tax Payback Period
years
2
Pre Tax NPV @8% CoC
US$
107,261,317
Pre Tax IRR
%
82%
Pre Tax and Royalty Undiscounted Cashflow
US$
194,306,354
Pre Tax Payback Period
years
2
Namibian/US$ exchange rate
NA
15:1
Table 1: Key Project Economic Highlights
The level of accuracy for some of the key inputs are generally of a higher level than normally associated
with a PEA as only "Measured and Indicated" resources are included and major capital and operating
cost items such as large equipment prices and mining and trucking costs are based on fixed prices
obtained in early June 2022.
The authors of the report, CREO Engineering (Namibia), also list the following opportunities for
improving economics:
Resource
: The Okanjande deposit hosts a hard rock resource of 24,200,000t of ore with 1,287,000t of
contained graphite in the measured and indicated categories and 7,200,000t of ore with 359,000t of
contained graphite in the inferred category (@3.1%TGC cut-off grade and $1,200/t Graphite price).
This
presents the opportunity to build a large new processing plant at the mine site with the capability of
producing 100,000-150,000tpy of graphite concentrate. This will significantly reduce operational costs
due to the elimination of ore transport requirements and the introduction of economies of scale.
The
Company plans to initiate a PEA on this development scenario in the coming months.
Exploration:
There is ample evidence of more resources in the region. These need to be quantified by
exploration and drilling.
Processing
: Investigate Rutile recovery from the graphite flotation tails and existing TSF facility.
Taxes, Royalties and Other Interests
: There are approximately US$50M in tax loss carry
forwards
relating to previous operations that could potentially be used to reduce taxable income.
This issue
requires further investigation by the Company's tax advisors.
Northern's Namibian operations consist of the Okanjande graphite deposit and the Okorusu processing
plant located 70km away.
Refurbishment of the Okorusu plant is well underway. The first 20 employees
were engaged during June and have been active cleaning the site, stripping equipment, renovating
offices and equipping the maintenance workshop. CREO has been appointed as the EPCM contractor,
detailed engineering for the new grinding circuits has begun, and long delivery equipment items ordered.
Further administration personnel are scheduled to join during July.
"The results of the PEA confirm our expectations for the project and validate the decision to proceed with
the acquisition and re-development at both Okanjande and Okorusu. We are well underway towards
achieving our objective of first production within 9-12 months with an excellent workforce that is highly
experienced in mining operations and 100% sourced within Namibia.
The opportunity to expand
production in the future is a huge, added bonus and something that Northern has already started to
investigate," commented Dave Marsh, Chief Operating Officer for Northern Graphite.
About Northern Graphite
Northern Graphite is a TSX Venture Exchange listed Canadian company focussed on becoming a world
leader in producing natural graphite and upgrading it into high value products critical to the green
economy including anode material for LiBs/EVs, fuel cells and graphene, as well as advanced industrial
technologies.
Northern is the only significant graphite producing company in North America and will become the third
largest non-Chinese producer when its Namibian operations come back on line in the first half of 2023.
The Company also has two large scale development projects, Bissett Creek in Ontario and Okanjande
in Namibia, that will be a source of continued production growth in the future.
All projects have "battery
quality" graphite and are located close to infrastructure in politically stable countries.
Qualified Person
Gregory Bowes, B.Sc. MBA P.Geo
is a "qualified person" as defined under NI 43-101 and has reviewed
and approved the content of this news release.
For additional information
Please visit the Company's website at
http://www.northerngraphite.com/investors/presentation/
, the
Company's profile on
www.sedar.com,
our
Social Channels
listed below or contact the Company at
(613) 241-9959.
YouTube
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