Ecograf (ASX:EGR) share price powers up on government approval news

The Ecograf (ASX:EGR) share price is higher today after the company released an update regarding its Epanko Graphite mine. Here’s the scoop.

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The Ecograf Ltd (ASX: EGR) share price is on the move today. The company announced government approval progress relating to its Epanko Graphite Mine before the stock shot up.

At the time of writing, the Ecograf share price is up 4.76% to 67 cents a share.

Epanko Graphite Mine financing progresses

Ecograf announced that the company has progressed the debt financing approval of US$60 million for its Tanzania-based Epanko Graphite Mine.

The Ecograf share price reacted positively to this news considering that the business has already invested $20 million over the past 7 years in Epanko.

Progress made to date includes completion of the feasibility study, obtainment of environmental approvals, and execution of an independent engineer’s review.

The business has also put capital toward arranging sales contracts for the export of graphite products to Europe and Asia.

In today’s announcement, Ecograf also attached a summary of the Epanko Bankable Feasibility study. In the summary, Ecograf forecasts that the Epanko Graphite Mine will generate earnings before interest, tax, depreciation and amortisation (EBITDA) of US$80 million per annum.

Ecograf intends to offer an electric vehicle battery graphite option that “provides a high quality, cost competitive alternative to existing battery graphite produced using toxic hydrofluoric acid.”

The report further notes that the metallurgical test work has shown the mine’s potential to produce 99% carbon concentrate from fresh ore.

High quality carbon helps cut purification costs connected with battery graphite production. Ecograf estimates that the average graphite concentrate production of the Epanko mine will be 60,000 tonnes per annum.

Ecograf share price snapshot

The Ecograf share price exploded 1,045% higher over the previous year and has soared 668% over the past six months.

The company has a market capitalisation of approximately $307.1 million and there are 455 million shares outstanding.

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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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