Sarytogan Graphite (ASX: SGA) has kicked off a 20-tonne trial mining program at its Central Graphite Zone (CGZ) in Kazakhstan, collecting graphite ore samples for extensive testing and customer qualification.
The samples will also form part of the company’s definitive feasibility study (DFS) process, which will be focused on firming up the milling assumptions outlined in its prefeasibility study (PFS).
Management says the bulk sample will be excavated from the CGZ and processed at a local Kazakh laboratory. The milled product will then be analysed to validate the energy and equipment requirements needed for full-scale production.
Of the total sample, up to one tonne will also be sent to Australia to produce a bulk flotation concentrate, similar to a 20kg sample previously produced and shipped 12 months ago – but on a bigger scale.
Additionally, Sarytogan plans to manufacture a micro-crystalline C graphite product, dubbed “Micro80C”, grading 80 per cent to 85 per cent. Both the concentrate and the Micro80C will be initially available for vendors with equipment designed for thermal purification.
A portion of the graphite will also undergo further refinement to achieve “five nines (5N)” purity – a high-grade material essential for battery production.
Following the positive PFS results, we now move forward with the next steps in the development of the Sarytogan Graphite Project, being customer-focused early-works. A 20-tonne trial mining exercise will provide samples for grinding and machine vendor tests to a DFS standard and most importantly, generation of samples for customer qualification.
Sarytogan Graphite Managing Director Sean Gregory
The company’s recently-released PFS outlined a 60-year mine life, which would be first supplied with ore from the CGZ. Hosting 8.6 million tonnes at 30 per cent total graphitic carbon (TGC), the deposit represents just four per cent of the total 229 million-tonne resource under Sarytogan’s stewardship.
Given that the deposit is also so close to surface with an average forecast strip ratio of 0.2:1, the modelling has confirmed that the project will be an extremely low-cost exercise, revealing that it could produce 50,000 tonnes per annum for a capital outlay of just $95 million.
By using the cashflow for the initial staged production, the company may eventually push for three additional stages of development for an extra $433 million in capital expenditure, which could ultimately drive the project’s net present value (NPV) to as high as $787 million.
Sarytogan has continued its exploration efforts at Bainazar, a project 20km west of its graphite deposit where it is exploring for copper porphyry mineralisation and results are expected soon. The company is also working to complete a $5 million equity placement from the European Bank for Reconstruction and Development, with the first tranche of $2.5 million set to be received next month and the second in December.
Even though the Saytogan graphite deposit was first discovered at site in the 1980s during the Soviet era, it wasn’t until 2018 after graphite – which is mainly used as an anode material in lithium-ion batteries – had been added to the critical metal list in Europe and Japan that the company secured the permit to explore the area and subsequently release a mineral resource last year.
Sitting equidistant to China and Europe, both huge consumers of graphite, gives Sarytogan a distinct advantage over other hopeful producers to be able to generate competitive demand for its end product. Coupled with the fact that the company is also looking at producing several products of varying purity and has a low-cost source of high-grade graphite, Sarytogan appears well-positioned to capitalise.
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