Renascor reveals strong Sivour graphite numbers while market not yet convinced

THERE’S a vast gulf between what Renascor Resources sees as possible at its Siviour graphite project on South Australia’s Eyre Peninsula and what the market has been considering likely.
Renascor reveals strong Sivour graphite numbers while market not yet convinced Renascor reveals strong Sivour graphite numbers while market not yet convinced Renascor reveals strong Sivour graphite numbers while market not yet convinced Renascor reveals strong Sivour graphite numbers while market not yet convinced Renascor reveals strong Sivour graphite numbers while market not yet convinced

The graphite orebody to be mined is flat lying at Siviour, South Australia

Renascor's definitive feasibility study points to a A$118 million initial development generating average earnings of about $50 million in the early years and $83 million per annum over the 40-year project life.

A post-tax net present value of $388 million has been calculated.

Despite the tenor of those numbers, the market has recently been according Renascor an enterprise value of about $13-14 million.

Renascor believes up to 60% of the start-up capital requirement is expected to qualify for in principle support from Atradius, the Dutch export credit agency (ECA), subject to finalising the procurement strategy in the front-end engineering design phase.

Renascor said its next steps are expected to include securing binding offtake agreements, final project permitting and commencing financial due diligence.

Renasor claims Siviour is "perfectly positioned to help meet the graphite supply gap arising from (the) inability of existing supply to meet demand driven by lithium-ion battery demand".

Still, the spluttering performance of the lithium battery/EV space in recent times amidst uncertain global economic conditions, and the huge fall from grace of graphite heavyweight Syrah Resources, have been unhelpful headwinds for Renascor to contend against.  

Shares in Renascor were up 8% to 1.4c in early trade following the release of the definitive feasibility study.

At that price Renascor is capitalised at $16 million.

Renascor started the current quarter with $1.8 million cash.