Valence Industries (ASX:VXL) has completed its Feasibility Study...

Valence Industries (ASX:VXL) has completed its Feasibility Study for the expansion of its currently operating Phase I graphite mining, processing and advanced manufacturing capacity at the Uley Project in South Australia.

This has demonstrated an IRR of 46% based on current Ore Reserves with Phase II expansion capex of A$37 million staged over 3 years.

Mine gate opex has been estimated at between A$400 and A$500 per tonne. Graphite sales range from A$1,669 to A$4,774 per tonne.

It has also defined a Phase III Advanced Product Handling with initial capex of A$13 million to meet customer demand for high purity and specialist graphite products.

The staged 25,000 tonne per annum increments will increase Uley graphite output to 64,000tpa.

Valence has also adopted a number of recommendations from the Feasibility Study and has directed management to review some optimisation alternatives before commencing significant construction activities.

In addition, recent testing of the Uley Pit 2 ore has identified how a proven overseas minerals treatment technology could be adapted for Uley Graphite, including for the unique very high grade Arterial Flake, to further reduce the capital and operating costs, particularly for crushing.

Valence Industries expect that these activities will be completed by the end of the March quarter 2015 and that securing of financing and detailed project planning for construction can continue over that quarter.


Uley Project

The Uley Project is a coarse flake graphite deposit that occurs in weathered schist and gneiss.

It contains disseminated, high-grade flake graphite and the mineralisation is near surface, with the final manufactured graphite products recognised and purchased by many customers for their high quality.

Uley has an Ore Reserve of 261,000 tonnes grading 12.9% graphitic carbon.

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