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Lincoln Minerals Ltd (ASX:LML) has updated the market on its prefeasibility activity for the Kookaburra Graphite Project (KGP) in South Australia, announcing a ‘staged development strategy’ which seeks to circumvent the challenges of a low price for the commodity with a focus on the project’s potential for low start-up and operating costs.
And the market seems pleased with the announcement, meaning that by 12:26 AEDT, Lincoln shares were trading at 0.5 cents, a rise of 10% since the market opened.
The price of natural graphite has been under pressure since late last year, as a result of oversupply – particularly of synthetics – and slow trade flows.
However, Lincoln is convinced that KGP could still leverage its unique features to deliver an economical project – the first to produce graphite in this country – based on the current mining lease, with the possibility of expanding the project further down the line.
In terms of delivering on low costs, the company emphasised that KGP comprised high-grade core at surface, and existing mining license and infrastructure, with the latter including power 5 kilometres away, water access 12 kilometres away, and roads located 0.1 kilometres away.
Additionally, the project’s location also sets it 25 minutes from the regional centre of Port Lincoln.
In terms of planning, the company is aiming to complete its upgraded prefeasibility study (PFS) in the fourth quarter of this year, building on what was already known from a feasibility study done in 2017.
CEO Jonathon Trewartha said the project had a suite of features which made a low-cost start up ossible.
“Lincoln’s Kookaburra Graphite Project is unique in Australia, in that it benefits from extremely high-grade graphite at surface, requiring no pre-strip, thanks to an orebody which literally sticks out of the ground,” he said.
“As an experienced mining project developer, it is clear to me that with a Mining Lease already approved and developing such high grades at the front end of the production schedule, means that Lincoln is likely to be able to generate attractive returns, even at low graphite prices.
“Our strategy to stage the development and initially to focus on the high grade at KGP will also allow us to progress to first ore potentially quicker than any other Australian project in Australia and enable Lincoln to deliver production-scale graphite concentrate for qualification in the EV markets while we plan the development of a larger project to feed the global demand for high quality anode material.”
