Kingsland Minerals (ASX:KNG) scoping study highlights globally competitive Position for Leliyn Graphite Project

Kingsland Minerals (ASX:KNG) has released the Scoping Study for its Leliyn Graphite Project in the Northern Territory, confirming that the project can be developed as a globally competitive graphite operation with strong margins and attractive financial outcomes.

To provide further clarity, Kingsland Minerals Managing Director, Richard Maddocks, addressed key questions about the Study, its results and the next steps.

How competitive are Leliyn’s operating costs compared to other global graphite producers?

The Scoping Study demonstrates that Leliyn is positioned at the lower end of the global graphite cost curve, with a C1 operating cost of A$651 per tonne of concentrate, equivalent to US$423 per tonne using an exchange rate of 0.65.

This figure includes mining, processing, general administration and transport, and places Leliyn in a highly competitive position, particularly outside of China.

The all-in sustaining cost was calculated at A$796 per tonne, leaving a strong margin against the assumed life-of-mine graphite price of A$1,580 per tonne.

“This result is even more promising given that we only had a limited amount of mineralisation to utilise for the study. With more drilling and increased indicated resources, we are confident that we can build on this result and establish a long-life, profitable graphite concentrate operation.”

What are the key financial outcomes of the Scoping Study?

The Study forecasts production of approximately 662,000 tonnes of graphite concentrate over a 6.9-year processing period, equating to an average of 95,000 tonnes per annum.

Life-of-mine revenue is estimated at A$1.05 billion, with operating cashflow before tax projected at A$563 million and free cash flow of A$186 million once capital is repaid.

The payback period is estimated at four years from the start of production, underlining the project’s robust economics and timely return profile.

“The C1 or cash operating cost is forecast to be just US$423 per tonne of concentrate produced, which is very competitive with current operations worldwide.”

How much confidence can investors place in the resource base underpinning the Scoping Study?

The Mineral Resource Estimate supporting the Study, released in April 2025, totals 192.5 million tonnes at 7.3% total graphitic carbon, containing 14 million tonnes of graphite.

Of this, 12.3 million tonnes are classified as Indicated and 180.2 million tonnes as Inferred.

The mining schedule incorporates around 70 percent Indicated and 30 percent Inferred material, with the first three years of production drawing on 84 percent Indicated resources.

This structure provides confidence during the critical early years when capital is being repaid.

“Kingsland confirms that the financial viability of the Leliyn Project is not dependent on the inclusion of Inferred Resources in the production schedule.”

Further drilling is planned to convert Inferred resources into the Indicated category, which would create opportunities to extend mine life, optimise pit design and potentially increase throughput in future assessments.

What are the estimated capital requirements, and how does Kingsland plan to fund them?

The Scoping Study outlines an initial capital requirement of approximately A$343 million.

This includes A$265 million for processing and infrastructure, A$52 million for non-process owner’s costs such as the accommodation village, access road, powerline and airstrip, A$25 million in contingency, A$34 million for sustaining capital and A$10 million for mine closure and rehabilitation.

The project is scheduled to undergo a two-year construction phase before production begins and pre-production funding in excess of A$300 million will be required.

While formal approaches to potential providers of debt or equity have not commenced, Kingsland has already raised approximately A$6.2 million to advance the project, including a strategic placement to Quinbrook Infrastructure Partners.

The Study also notes the potential for government-backed funding sources such as the Northern Australia Infrastructure Fund, which has previously allocated resources to critical minerals projects.

What are the next steps following this Scoping Study, and where can further value be unlocked?

The Scoping Study was conducted as a proof of concept and confirmed that Leliyn can produce graphite concentrate at globally competitive costs.

The next steps include drilling to expand the Indicated resource base, which is essential for extending mine life and optimising production schedules.

Metallurgical testwork will also continue, as the flotation parameters used in the Study were based on limited samples, and further testing is expected to improve recovery and concentrate grade.

Kingsland is also assessing ways to reduce energy costs, with the project located near the Amadeus-Darwin gas pipeline and renewable energy options under review.

In parallel, metallurgical work is underway to assess the potential for gallium and rutile by-product credits, which could add further value to the project. These initiatives collectively

provide clear opportunities for optimisation and growth as the Company progresses towards pre-feasibility.

Positioning Leliyn for the next stage

The Scoping Study provides a solid foundation for the Leliyn Graphite Project, confirming its technical and financial strength and establishing a pathway to becoming a globally competitive producer.

With additional drilling, enhanced metallurgical testwork, optimisation of operating costs and the potential for by-product credits, Kingsland Minerals is focused on further strengthening the project as it advances to the pre-feasibility stage.

As Managing Director Richard Maddocks emphasises, the Scoping Study results confirm that Leliyn has the potential to become a long-life, low-cost graphite producer, while ongoing work programs are designed to unlock further value and provide long-term benefits for shareholders.

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