Falcon Confirms Robust Economics in Anode Plant Study with US$86 Million Initial CapEx and First Production Targeted for H2 2027; Offtake and Testing Advancing

On November 13, 2025, Falcon Energy Materials announced the results of a technical-economic study for its planned natural graphite anode plant in Morocco. The study outlines an initial capital expenditure (CapEx) of US$86 million to construct a plant capable of producing 26,000 tonnes per annum of Coated Spherical Purified Graphite (CSPG). The study projects an average operating cost of US$3,168 per tonne of CSPG and an average sales price of US$8,300 per tonne.

The company is targeting first production for the second half of 2027, following a 9-month detailed engineering period and a 15-month construction timeline. The news also notes that offtake discussions and product testing are advancing. It is important to note the company's disclaimer that this study is not a technical report for the purposes of National Instrument 43-101.

This news is materially positive as it provides a clear, de-risked path forward for the company's flagship project, effectively pivoting away from a major geopolitical risk.

Historically, Falcon's strategy, as outlined in its December 2024 Preliminary Economic Assessment (PEA), was an integrated development plan. This involved mining graphite at its Lola Project in Guinea and processing it at a new anode plant in Morocco. However, on May 16, 2025, the company disclosed that the government of Guinea had issued a decree revoking numerous permits, including the one for the Lola project. This event placed the entire integrated strategy and the critical feedstock supply in jeopardy.

The new technical study effectively decouples the Morocco anode plant from the high-risk Lola mine. It presents the project on a standalone basis, presumably sourcing graphite concentrate from the third-party market. This pivot significantly reduces geopolitical risk and demonstrates a pragmatic approach by management.

Comparing the new study to the anode plant portion of the December 2024 PEA: - CapEx: Increased to US$86 million from US$73 million (+18%). This increase is reasonable given this is a more detailed study and likely includes additional infrastructure required for a standalone merchant plant. - OpEx: Remained virtually unchanged at US$3,168/t versus US$3,193/t in the PEA. This is a critical point. The PEA's OpEx included a concentrate cost of US$1,286/t as an internal transfer price from the Lola mine. The new study does not disclose its assumed open-market concentrate purchase price, but for the total OpEx to be flat suggests either an optimistic assumption on feedstock pricing or significant cost savings in other areas. This requires clarification. - Sales Price: The assumed CSPG price was lowered to US$8,300/t from US$9,000/t in the PEA, which is a more conservative and prudent assumption.

Overall, the announcement provides a credible development plan, a defined capital cost, and a clear timeline. It follows positive execution updates throughout the year on the pilot plant in Morocco, which is on track for Q4 2025 commissioning and is already producing samples for three potential customers (as per the Oct 16, 2025 release). While this study is not NI 43-101 compliant, it solidifies the company's new strategy and provides the basis for the next crucial steps: securing offtake agreements and project financing. The primary risk now shifts from geopolitical uncertainty to financing and execution.

Falcon Energy Materials plc is a development-stage company aiming to become a key supplier of coated spherical purified graphite (CSPG) for the lithium-ion battery market, specifically targeting European and North American end-users.

The company's flagship project is a planned industrial-scale Anode Plant in Jorf Lasfar, Morocco. The strategy is to import natural graphite concentrate and process it into high-value CSPG. This project is supported by a pilot plant, currently under construction and expected to be commissioned in Q4 2025, to facilitate customer qualification.

The company previously pursued an integrated strategy that included its Lola Graphite mining project in Guinea as the feedstock source. However, due to the potential revocation of its mining permit in Guinea, the company has pivoted to focus on the standalone Morocco Anode Plant.