Feasibility study results for K.Hill battery-grade manganese project released

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Feasibility study results for K.Hill battery-grade manganese project released

Giyani Metals Corp. is pleased to provide results of the feasibility study for the K.Hill battery-grade manganese project in Botswana.

The FS has been prepared by SRK Consulting (SRK), as lead, on an integrated mining and processing operation for the onsite production of high-purity manganese sulphate monohydrate (HPMSM) directly from manganese oxide ore mined at K.Hill. HPMSM is a refined precursor material used in the production of cathode powders for lithium-ion batteries (LI Batteries) deployed in electric vehicles (EVs).

K.Hill’s total Indicated Resource of 2.1 million tonnes (“Mt”), estimated by SRK in February 2022, was evaluated for the purpose of the FS and almost 100% of the Indicated Resources have been converted into 2.0 Mt of Probable Reserves.

The Inferred Resource of 3.1 Mt for K.Hill, estimated by SRK, is in the process of evaluation to be upgraded into the Indicated Resource category. New Mineral Resource Estimates for K.Hill and the nearby Otse manganese oxide prospect are currently targeted for completion in H1 2023.

Jonathan Henry, Executive Chair of Giyani, commented: Our flagship K.Hill manganese project has the potential to be one of the most significant and largest battery-grade manganese producers globally. The feasibility study shows how far the scope of the Project has developed since the April 2021 preliminary economic assessment and is the next step to bringing this project into production. These results demonstrate the robust economics of K.Hill, with our ongoing work also highlighting the expansion and optimization potential.

Giyani has an early-mover advantage to meet the growing demand for HPMSM from the EV sector, which is prioritizing responsible, low-carbon producers outside of the dominant Chinese supply chain. Our hydrometallurgical process, which treats our captive ore without the need for calcining or electrorefining, saves both cost and carbon emissions, as evidenced by the results of the recent life cycle assessment for K.Hill.

Alongside the optimization work that will be completed after the FS release, which will review opportunities to enhance the Project’s value, we continue to evaluate the 3.1 Mt of Inferred Resources at K.Hill and potential additional resources at nearby Otse still to be consolidated into the Project plan, with the view to extend K.Hill’s operating life and production capacity significantly.

In parallel to the FS work, the team has progressed the construction of our demonstration plant and it remains on track to produce HPMSM samples for testing by potential off-takers in H2 2023.

Operational and Economic Highlights

The FS is based on a Probable Reserve Estimate that will be detailed in the updated National Instrument (“NI”) 43-101 Technical Report on the Project.

Taxation

For the purposes of the TEM, following a review of the Botswana tax regime and discussions with local stakeholders, it has been assumed that the Project will be subdivided into two business units with discrete tax treatment: mining; and manufacturing.

The mining operation will sell ore to the manufacturing operation and be taxed according to the Botswana mining company tax formula (minimum of 22% on operating income). A mining royalty of 3% will be applied to the revenue on the sale of the manganese ore to the manufacturing unit. Capital investments on the mining unit can be depreciated in the year incurred and unredeemed capital will be carried forward indefinitely.

Income from the manufacturing unit will be taxed at the Botswana manufacturing tax rate of 15%, assuming a manufacturing development order will be received from the Botswana authorities. For the manufacturing unit, initial capital investments will depreciate at 10% per year on a straight-line basis and sustaining capital will depreciate at 20% per year.

Capital and Operating Expenditures

Capital and operating expenditure estimates were provided by SRK and Coffey Geotechnics Ltd., a Tetra Tech Inc. company (“Tetra Tech”).

Capital expenditure

Capital expenditure estimates were prepared for initial, sustaining and closure capital. The total estimated initial capital expenditure for the design, construction, installation, and commissioning for all facilities and equipment for the Project is US$281M including contingency of US$32M.

This estimate includes direct field costs required to execute the Project, plus indirect costs associated with design, construction, installation, and commissioning. This estimate is based on pricing as of H2 2022, with no allowances for inflation or escalation . Closure costs of US$5M have been estimated.

This estimate is a Class 3 estimate prepared in accordance with the Association for the Advancement of Cost Engineering (AACE®) International Cost Estimate Classification System. The accuracy of the estimate is ‑10% to +15%.

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