Evolution Energy kicks off exploration drilling to boost graphite mine life

Evolution Energy Minerals (ASX: EV1) is seeking to beef up the mine life of its flagship Chilalo Graphite Project via a 7,500m drill program.

A Definitive Feasibility Study (DFS) for Chilalo was completed in 2020, which noted exploration upside as one of several opportunities that could improve the project's economics.

"The discovery of any additional near-surface high-grade deposits has the potential to contribute to a reduction in mining operating costs compared to those in the DFS," Evolution said in a statement.

Drilling high conductance targets

The drill program is comprised of approximately 3,000m of shallow reverse circulation drilling that will target high-conductance targets obtained from geophysics results in March 2022 as well as step-out drilling from the most promising targets.

Back then, Evolution identified over 33km of 'high and ultra-high conductance targets' during an electromagnetics program around the Chilalo project.

"Given graphite’s high conductivity level, these conductors are expected to represent near-surface, high-grade and thick graphite deposits," notes Evolution.

"... any exploration success is expected to not only enhance Chilalo’s project economics, but also support meaningful mine life extensions to enable a production expansion to meet the rapidly growing demand for battery anode materials," said Managing Director, Phil Hoskins.

Chilalo at a glance

The 2020 DFS "demonstrated the economic viability of the Chilalo Project with strong margins and a significant near-term value-add market opportunity."

The project had a mine life of 18 years, with average graphite concentrate production of 50,000 tonnes per annum and a post-tax net present value of US$331m. The net present value assumed a graphite concentrate price of US$1,534 a tonne.

In May, Evolution signed a binding offtake agreement with China's Yichang Xincheng Graphite Co for 30,000 tones per annum of coarse flake graphite for a minimum of three years, or a little over 50% of the project's annual production.

Evolution is currently progressing an updated DFS, which is expected to be complete later this quarter.

Source: Evolution Energy

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