Australian-owned Sarytogan Graphite, featured in our previous post, has announced the results of its prefeasibility study (PFS) for its graphite deposit in central Kazakhstan, revealing a net present value (NPV) of approximately €474 million. The study outlines a phased development plan with an initial capital expenditure of around €57 million, aimed at producing 50,000 tonnes of beneficiated graphite annually. The plan includes three subsequent stages of expansion, requiring an additional investment of approximately €258 million, which could bring the project’s NPV to the projected €474 million.
The study projects three product categories:
- Microcrystalline graphite, with over 80 percent carbon content, at €683 to €724 per tonne.
- Ultra-high-purity fines (UHPF), with purity levels up to the “five nines” standard, at €4090 to €5109 per tonne.
- Uncoated and coated spherical purified graphite (USPG and CSPG) at €2290 to €7327 per tonne.
From an investment return perspective, the internal rate of return (IRR) is estimated to reach up to 35 percent, indicating a potentially high return on the capital invested, particularly when considering the initial capex of €57 million. Given the relatively modest upfront capital required for the first phase of production, coupled with the substantial projected NPV, the return on investment (ROI) for early investors could be significant.
The financial outlook is further supported by an estimated EBITDA margin of up to 67 percent, which suggests that the project could generate high profitability relative to its operating expenses. This margin is particularly notable in the context of the projected graphite prices. As global demand for graphite, driven by its critical role in batteries and other advanced technologies, is expected to increase, the pricing forecast provided in the PFS appears conservative.
With a total resource of 229 million tonnes of 28.9 percent total graphitic carbon (TGC), the Sarytogan project has a projected mine life of 60 years, utilizing just 4 percent of the total resource.
The European Union’s designation of graphite as a critical raw material, along with the memorandum of understanding (MoU) between the EU and Kazakhstan for battery raw materials supply, adds strategic value to the Sarytogan project. The proximity to key European and Chinese markets enhances its potential as a major supplier of natural graphite, positioning the company to benefit from geopolitical and market shifts that favor local and stable sources of critical materials.
Sarytogan Graphite is progressing towards a definitive feasibility study (DFS), with early work on environmental permitting and further metallurgical testing underway.
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