A feasibility study into the expansion of Toronto-based battery minerals development company NextSource Materials' Molo graphite mine, in Madagascar, has confirmed highly attractive economics, the company reports.

The study considers an expansion to the Molo mine’s current Phase 1 production capacity through the construction of an additional and standalone processing plant that increases the steady-state production rate to 150 000 t/y of SuperFlake graphite concentrate over a 25-year life-of-mine.

The study projects a capital cost of $161.7-million resulting in a pre-tax net present value, using an 8% discount rate, of $424.1-million and a pre-tax internal rate of return of 31.1%.

It assumes the additional processing plant will be built adjacent to the current Phase 1 processing plant, which is presently in the ramp-up stage of production.

The expansion will use the company’s unique, fully modular build approach used to construct its Phase 1 processing plant, which greatly reduces build time and associated costs in relation to conventional mine construction, the company says.

“We are very pleased the feasibility study confirms the strong financial potential of a larger-scale operation and significant scalability of our Molo mine to meet the robust market demand for flake graphite for use in electric vehicle (EV) batteries.

"This is especially timely given the recent announcement of export restrictions on flake graphite and graphite anode material from China. An expansion of this magnitude will position NextSource as a major global supplier and underpins our vertical integration strategy to offer an ample and secure supply of graphite flake for our planned battery anode facility, enabling direct supply to the EV battery market,” NextSource president and CEO Craig Scherba comments.

The company has not yet made a construction decision in respect to the expansion and will discuss the feasibility study results with its strategic partners to determine the optimal timing and assess the funding options that are available with respect to this potential mine expansion.