top of page
Writer's pictureJames Pearson

Sarytogan Graphite throws up US$518m NPV for Kazakhstan graphite


A springtime view of Sarytogan Graphite’s proposed plant site in central Kazakhstan.

Sarytogan Graphite (ASX: SGA) says it can deliver a US$518 (AU$787 million) net present value (NPV) for its massive graphite deposit in central Kazakhstan after today unveiling the much earlier than forecast results of a prefeasibility study (PFS).


The study has outlined a phased development approach, beginning with modest initial capex of US$62 million (AU$95 million) to produce 50,000 tonnes of beneficiated graphite per annum. It has also identified three further stages of development, requiring an investment of an additional US$282 million (AU$433 million), that could ultimately drive the project’s NPV up to the US$518 million at an exchange rate of 65c.


Earlier in the project’s development, the company recognised a significant advantage for the deposit in that the Sarytogan ore easily broke down into a premium microcrystalline size of less than 15 microns, meaning it will require minimal grinding energy. The finding will significantly reduce production costs, making the graphite particularly suitable for advanced industrial uses, including all types of batteries that demand ultra-fine sizing.


In light of that, the PFS has detailed plans for producing three distinct types of graphite products, each commanding competitive prices in the market.


Microcrystalline graphite, with more than 80 per cent carbon content, is projected to sell for US$746 to $791 per tonne (AU$1150 to $1216). Ultra-high-purity fines (UHPF), achieving purity levels of up to the coveted “five nines”, could fetch between US$4468 and $5577 per tonne (AU$6873 to $8580).


Additionally, uncoated and coated spherical purified graphite (USPG and CSPG) is anticipated to command prices ranging from US$2500 to $8000 per tonne (AU$3846 to $12,300).


The project has been carefully designed with a phased development approach to minimise initial capital expenditure as the company is keen to ensure that production is carefully aligned with market demand, avoiding any risk of oversupply. The cautious strategy is supported by a maiden reserve estimate, which suggests an impressive 60-year mine life while utilising just 4 per cent of the total resource, highlighting the potential for the project to expand during the course of multiple generations.


The PFS has highlighted a strong financial outlook and management says its project could deliver an EBITDA margin of up to 67 per cent across different stages, alongside an internal rate of return (IRR) peaking at 35 per cent.


The Sarytogan Graphite Project now takes its place as a very serious contender to play an important role in meeting the world’s energy storage needs. The physical attributes of the giant and exceptionally high-grade Sarytogan Graphite Deposit have shone through in the PFS, which envisages low costs and high margins, even at the conservative project sizing selected to minimise risk. Coupled with the recent planned investment by the European Bank for Reconstruction and Development strengthening of our balance sheet, Sarytogan is in a strong position to drive the project forward with early works on the DFS already underway.
Sarytogan Graphite Managing Director Sean Gregory

The company says a key to the Sarytogan project – which lies in the central Karaganda region of Kazakhstan, 400km south-east of Astana – is its proximity to both of the major European and Chinese graphite markets. The European Union’s recognition of graphite as a critical raw material in 2022 has resulted in a memorandum of understanding (MoU) with the Kazakhstan Government for battery raw materials supply, potentially further bolstering the strategic value of Sarytogan’s project.


The PFS envisions a comprehensive four-phase development plan, including an initial 50,000 tonnes per annum beneficiation plant, followed by three further expansions to enhance production capabilities. With a capex of up to US$344 million (AU$529 million) across the four stages, the project will scale in line with market demand to ensure sustained growth at the same time as creating value for shareholders by minimising dilution.


The company is already progressing towards a definitive feasibility study (DFS), with environmental permitting and further metallurgical testing underway.


With a total resource of 229 million tonnes of 28.9 per cent total graphitic carbon (TGC) for 66 million tonnes of contained graphite, Sarytogan is continuing to engage with potential partners and investors in a bid to get its project up and running. Given the expected future demand for battery metals, the size of the deposit and its proximity to the major markets, the future looks promising for the company and its mission to play a pivotal role in the global energy storage revolution.


Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au


11 views
bottom of page