Zentek’s (TSX-V:ZEN) Albany Graphite Project in Ontario, Canada, has returned a US$3.85 billion ($5.45 billion) after-tax net present value in a Preliminary Economic Assessment (PEA) prepared by Micon International.
The PEA evaluated the project’s integrated production pathway, encompassing resource extraction, flotation processing, and fluidised bed reactor purification.
The integrated production pathway intends to produce ‘ultra-high-purity’ graphite products for nuclear, defence, and strategic critical mineral supply chains.
Using a 5% discount rate, the PEA returned a pre-tax net present value of US$4.18 billion.
This indicates an internal rate of return of 27.7% pre-tax and 27.4% after-tax, with the after-tax payback period set at 4.4 years.
Using an 8% discount rate, the PEA returned a net present value of US$2.47 billion pre-tax and US$2.29 billion after-tax.
Zentek Chairman John Snisarenko says the study was commissioned to provide shareholders with answers to two questions: “What Albany may be capable of supporting, and what it could take to develop”.
“We now have that answer. The board has backed a deliberate repositioning of this company around critical minerals, and this is the first independent assessment of Albany on that basis,” Snisarenko says.
“Our responsibility from here is to convert this study into value for shareholders rather than into spending, which means staging the work, protecting the balance sheet and being disciplined about how each phase is funded.”
Zentek’s PEA for the Albany Project forecast an initial capital cost of US$817 million and a sustaining capital cost of US$1.16 billion. Life-of-mine (LOM) operating costs are estimated at US$6.65 billion, with an average annual operating cost of US$221.5 million.
The Albany Project has an overall project life of 35 years, inclusive of pre-production and closure, along with a production period of 30 years.
Design parameters indicate the project to have a nominal annual processing rate of 894,454 tonnes, with an average LOM head grade of 3.9% graphitic carbon and flotation recovery at 86%.
Zentek CEO Mohammed ‘Moe’ Jiwan says there is one measurement that helps underpin the PEA.
“At bench scale, Albany material purified thermally to 99.9992% carbon with a boron equivalent content of 2.60 parts per million [ppm], and it did so without hydrofluoric acid at any stage of the flowsheet,” Jiwan says.
“Buyers of material at this grade typically qualify a supplier before entering into commercial agreements, and transactions are often negotiated directly rather than referenced to an established index price.
“Against that backdrop, the study estimates initial capital requirements of US$817 million.
“Our priorities from here are to evaluate and demonstrate the purification process at larger scale, further define product specifications with potential customers, and continue advancing Albany in partnership with Constance Lake First Nation, on whose traditional territory the project sits.”
For the Albany Graphite Project, Zentek lists the key attributes as purity, process route, permitting, and location.
The company disclosed independent bench-scale testing to have measured 99.9992% carbon with an equivalent boron content of 2.60ppm in September last year.
These findings meet published benchmarks associated with certain nuclear-grade applications.
As for the process route, purification at Albany is thermal, meaning the flowsheet does not use hydrofluoric acid at any stage. Flotation also requires no lime or acid pH modifiers, simplifying the overall flowsheet.
The project design contemplated in the PEA indicates that Albany is not expected to trigger a federal impact assessment. This means permitting will advance through a single provincial process.
Finally, the project’s location in Northern Ontario is proximal to road, rail, power transmission, and natural gas infrastructure, and is situated within 30km of the Trans-Canada Highway.
Graphite is designated a critical mineral by both the Government of Canada and the US Department of Energy.
In 2024, global production of the commodity reached 1.6 million tonnes, marking a 4% increase from the year prior, with China taking the lead by producing 1.27 million tonnes and accounting for 79.4% of total production worldwide, as reported by Mining.com.au.
Zentek holds a graphite deposit that has demonstrated nuclear-grade purity, a growing patent portfolio, and three structurally distinct commercial platforms, each operating under the same client-funded CRO model.
Write to Maddison Elliott at Mining.com.au
Images: Mining.com.au
