South Star Battery Metals’ (TSXV:STS,OTCQB:STSBF) phased approach to bringing its graphite mine to production in Brazil will see the company spend a total of nearly C$80 million over the next five years, according to CEO Richard Pearce.
“Industrial metal is something (where) commercial relations have to be developed over time. So we’re stepping into it before we really have to spend oodles of cash,” he said. “So Phase 1 is about a C$10 million CAPEX, Phase 2 is about C$37 million or C$35 million CAPEX and then Phase 3 is about a C$30 million CAPEX. So in the next four to five years, we’ll be spending C$80 million to spin that up to 50,000 tonnes of concentrate per annum.”
Phase 1 construction of South Star’s Santa Cruz graphite project in Brazil began in June 2022, and the project is expected to be operational by the end of 2023, with cashflow commencing in January 2024.
Pearce also touted the ESG aspects of Santa Cruz, with 99 percent of its power coming from hydroelectric facilities. The company also has the opportunity to develop solar power generation capabilities at the site through a government loan program.
“Within Brazil, you can set up solar facilities on your site. You can plug that energy back into the grid. And it can really knock your energy price down, particularly as it relates to peaking power costs,” Pearce said. The company also plans to use renewable energy for drying concentrates, effectively lowering the operation’s carbon footprint.
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