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Lola PEA shows strong value case for SRG

Canadian project developer SRG Graphite (TSXV:SRG) has filed with securities regulators a preliminary economic assessment (PEA) on its flagship Lola project, in Guinea, saying there is ample room for further improvement of the economic metrics as it works towards completing a feasibility study.
Lola PEA shows strong value case for SRG Lola PEA shows strong value case for SRG Lola PEA shows strong value case for SRG Lola PEA shows strong value case for SRG Lola PEA shows strong value case for SRG

Drilling at Lola in Guinea

The West Africa-focused company reported on July 10 the Lola graphite project warranted further development work, after the base-case economic scenario demonstrated an after-tax net present value, at an 8% discount rate, of US$121 million. The post-tax internal rate of return came to 25%, based on an expected graphite sales price of $1,328 per metric tonne.

The PEA calculated operating costs of $372/t of concentrate, and $130/t for transport.

The mine plan was based on production of 50,200t of graphite per year over an expected 16-year mine life. The product is expected to range between 94% and 98% purity, covering all graphite flake size fractions. The Lola deposit has a low strip ratio of 0.39.

The project carries a price tag of $105 million, which includes a contingency of $15 million.

During trade-off assessment work, SRG had found several key points of improvement to incorporate in the feasibility study. Early works that would contribute to the next stage in development of the project is underway.

SRG, with a market capitalization of about C$80.5 million, is also making progress on its Gogota cobalt-nickel-scandium project - also in Guinea - for which it published a maiden resource estimate early in June.