$1.129 billion after-tax NPV with 8% discount rate and a 39.5% IRR at an average price$12,321 /t LCE with a 50-year life of mine and payback of 2 years and 3 months from commencement of production- Measured and indicated resources of 1.747 Mt of LCE with an average 923 mg/L Lithium with 800 mg/l cut off and 5.369 Mt of LCE with 637 mg/L Lithium with 400 mg/l cut off
- Proven and probable reserves of 1,671,900t of LCE with an average 786 mg/L Lithium for life of mine production of 50 years and 769,613 t of LCE with an average 912 mg/L Lithium for the first 20 years of production
- Average annual production of 20,000t of LCE (battery grade) for the first 20 years with significant potential to expand, with 50year life of mine reserves being only 31% of entire resource
- Low pre-production capital cost of
$370.5 million (excluding deferred and sustaining capital costs) and low operating costs of$2,954 /t of LCE - Industry proven processing, using conventional evaporation pond operations followed by concentrated brine purification and precipitation of lithium carbonate
The Technical Report, which is currently on QP review stage, was prepared by Worley, a leading global provider of professional project and asset services in the energy, chemicals and resources sectors with extensive experience in the design and construction of some of the largest and lowest cost lithium brine processing facilities in
"In a very short time since its discovery in
The FS represents a comprehensive study of the technical and economic viability of the 3Q Project and has advanced to a stage where a preferred processing route has been established, and an effective method of lithium extraction has been determined. Capacity for the feasibility study remains at 20,000 tonnes per year, but the design footprint for ponds and plant already considers an expansion to 40,000 tonnes per of LCE per year since the resource and reserve is large enough to justify larger production by shortening the mine life.
A technical report summarizing the FS will be filed on SEDAR within 45 days of the date of this news release.
FS Highlights with Comparison to Pre-Feasibility Study (PFS)
Description | PFS | FS |
After-Tax Net Present Value ("NPV") @ 8% Discount Rate | ||
After-Tax Internal Rate of Return ("IRR") | 49.9% | 39.5% |
Initial Capital Expenditures | ||
Cash Operating Costs (per tonne of lithium carbonate) | ||
Average Annual Production (lithium carbonate) | 20,000 | 20,000 |
Mine Life | 35 years | 50 years |
Payback Period (from commencement of production) | 2.2 Years | 2.25 Years |
Note: By-products (such as potash, calcium chloride and boric acid) are not included in the FS and could potentially add incremental value to the 3Q Project. All figures are quoted in |
Mineral Resources, Mineral Reserves and Mine Plan
Mineral resources were most recently published in a press release dated
High-Grade Lithium (Cut-off 800 mg/L) | Deposit at Large (Cut-off 400 mg/L) | ||||||
Measured | Indicated | M&I | Inferred | Measured | Indicated | M&I | Inferred |
Volume [Mm3] | |||||||
201 | 155 | 357 | 33.4 | 450 | 1,130 | 1,580 | 757 |
Average Lithium concentration (mg/L) | |||||||
923 | 922 | 923 | 918 | 792 | 576 | 637 | 561 |
Lithium Carbonate Tonnage (rounded) | |||||||
988,000 | 759,000 | 1,747,000 | 163,000 | 1,897,000 | 3,472,000 | 5,369,000 | 2,261,000 |
• | The key assumptions, parameters, and methods used to estimate the new mineral resource are the same of the ones disclosed in the press release dated |
• | LCE conversion factor: 5.32 |
After pond filling is complete, the strategy to maximize value at the 3Q Project is to first extract the high-grade brine with four new and two existing wells strategically located in the middle of the high-grade component of the measured and indicated resource. Early extraction of high-grade brine allows early-stage pond size to be minimized. Grade is predicted to decrease with time, as progressively lower-grade brine is extracted.
A numerical groundwater model was developed to support the reserve estimate and development of the 50-year life of mine plan. Modelling predicts a brine grade decrease over time and simulates additional brine recovery to maintain production at around 20,000 tonnes of lithium carbonate equivalent (LCE) for the first 20 years of mine operation. Thereafter, production decreases as recovered grade decreases. The modelling simulates long term brine recovery, based on a rigorous evaluation of groundwater flow and brine transport.
The tonnage, grade, and classification of the mineral reserves captured within the FS life of mine plan are summarized below.
Year | Brine | Average Li | Li metal [tonnes] | LCE [tonnes] | *Resources | ||
Proven | Probable | Proven | Probable | ||||
14 | 4.7 | 655 | 1,689 | 1,377 | 8,993 | 7,331 | 0.3 |
24 | 9.6 | 747 | 3,997 | 3,181 | 21,171 | 16,931 | 0.7 |
3-10 | 65.6 | 942 | 38,549 | 22,111 | 205,187 | 117,694 | 6.0 |
11-20 | 82 | 922 | 48,853 | 24,850 | 260,034 | 132,273 | 7.3 |
21-30 | 82 | 775 | 41,647 | 20,454 | 221,677 | 108,873 | 6.2 |
31-40 | 82 | 708 | 37,415 | 19,535 | 199,150 | 103,979 | 5.6 |
41-50 | 82 | 626 | 31,570 | 18,695 | 168,040 | 99,507 | 5.0 |
20 Year | 161.9 | 912 | 93,068 | 51,520 | 495,384 | 274,229 | 14.3 |
Total 50 Year | 408 | 786 | 203,700 | 110,200 | 1,084,300 | 587,600 | 31 |
1. | Brine produced from outside the measured + indicated resource is included here but excluded from Reserves. |
2. | Based on measured + indicated resource of 5,369,000 tonnes of LCE (400 mg/L cut-off). |
3. | Reserve estimate numbers have been rounded; they represent the quantity recovered at the wellhead. |
4. | The grade of the brine used in years one and two to fill the ponds is purposely low to lengthen the evaporation time as the rest of the infrastructure is built. The pond system is calibrated to enter steady state production in year three. |
5. | The effective date of this mineral reserve estimate is |
6. | LCE conversion factor:5.32 |
The design recovery rates are within the tested parameters of the brine aquifer. The Company has already installed one production well capable of sustained production of 84 L/s. In the initial 14 years of the mine plan, four new and seven existing wells would each produce between 12.5 and 42.2 L/s of high-grade brine. From year 15 onwards, two new wells and one existing well would be added to the operation, with individual production rates between 13 and 84.5 L/s. These variable brine recovery rates are designed to maintain a relatively constant annual production rate of approximately 20,000 tonnes LCE for the first 20 years, and then decreasing thereafter as the resource is recovered. Ample space exists within the resource for additional production wells, if required.
Proposed Mining Operation and Processing
The FS identifies the preferred development option as being a conventional evaporation pond operation followed by concentrated brine purification and precipitation of lithium carbonate. The processing method is unique to the 3Q Project high grade, low impurity brine, allowing the Company to minimize water and energy consumption. This has been validated by significant research completed on optimal process flows.
The process remains relatively unchanged from that described in the press release dated
The concentrated brine (with 3.3% lithium by mass) is then transported to the purification plant in Fiambalá.
Processing of the concentrated brine into Lithium Carbonate is achieved in five steps:
- Solvent Extraction to remove remaining boron
- Removal at ambient temperature of magnesium with calcium hydroxide produced as a by-product in the plant
- Calcium removal with caustic soda at room temperature
- Polishing of residual calcium with soda ash at room temperature
- Addition of soda ash and heat to precipitate lithium carbonate, followed by drying and packaging
This process is based on conventional, proven parameters and has been tested in our pilot plant operations for the last few years.
Key parameters that provide the basis for the FS and other qualifications and assumptions are provided below.
Capital Costs
Description | ($ Million) |
Direct Costs | |
Evaporation Ponds and Wells | 140.7 |
Plant Facilities and Equipment | 85.2 |
Infrastructure and Others | 61.0 |
Direct Costs Subtotal | 286.9 |
Indirect Costs | 43.9 |
Contingency | 39.7 |
Total Initial Capital Costs | 370.5 |
Deferred and Sustaining Capital Costs | 143.5 |
Note: numbers may not match exactly due to rounding. All Currency in US dollars |
Operating Costs
Average operating costs per tonne lithium carbonate produced are as follows:
Description | $/tonne Li2CO3 | ||
Direct Costs | |||
Chemical Additives and Reagents | 31,598 | 1,580 | |
Salt Harvesting Equipment | 3,800 | 190 | |
Energy | 6,280 | 314 | |
6,574 | 329 | ||
Manpower | 5,920 | 296 | |
1,760 | 88 | ||
Maintenance | 1,880 | 94 | |
Direct Costs Subtotal | 57,812 | 2,891 | |
Indirect Costs | |||
General Expenses | 1,260 | 63 | |
Production Total Costs | 59,072 | 2,954 |
Note: numbers may not match exactly due to rounding. All currency in US dollars |
Lithium Markets and Price
Year | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | Onwards |
Lithium |
Based on the study of
Base Case Sensitivity Analysis
A sensitivity analysis was done for different Discounts rates proving positive economics under different scenarios:
Discount Rate | NPV After Tax $ | IRR After Tax | NPV Pre Tax $ | IRR |
6% | 39.5% | 46.7% | ||
8% | ||||
10% |
Environmental Permitting
Property Acquisition
In early
Qualified Persons
The FS was prepared by Worley and Groundwater in conjunction with a team of globally recognized consultants independent from the company. The two independent qualified persons that lead the team of consultants are:
Marek Dworzanowski , CEng, BSc(Hons), HonFSAIMM, FIMMM Honorary Fellow of theSouthern African Institute of Mining & Metallurgy (SAIMM), membership number 19594, Fellow of theInstitute of Materials , Minerals and Mining (IMMM), membership number 485805, registered as a Chartered Engineer with theEngineering Council of the United Kingdom , registration number 485805, is the independent qualified person signing the report for Worley.Mark King , Ph.D.,P.Geo ., a Canadian Professional Geoscientist registered with theAssociation of Professional Geoscientists of Nova Scotia , is the independent qualified person signing the report for GroundwaterMr. Dworzanowski andDr. King are qualified persons within the meaning of that term under NI 43-101, and each has reviewed and approved the scientific and technical disclosure in this press release.
Data Verification
The data verification procedures were broadly the same as described in the Company's technical report supporting its previously disclosed pre-feasibility study, entitled "
About
The 3Q Project is located in the Province of Catamarca, the largest lithium producing area in
On
Additional information regarding
Neither
Cautionary Note Regarding Forward Looking Statements – Certain information set forth in this news release may contain forward-looking statements. Such statements include but are not limited to, expectations with respect to obtaining approval of the environmental impact report by the Mining Authority, expectations related to NPV, IRR, capital costs, operating costs, cash flows, operating parameters, lithium markets and pricing, payback periods, production and mine life at the 3Q Project, estimates of mineral resources and mineral reserves, statements with respect to completion of the arrangement with Zijin and the benefits to shareholders from the arrangement, and expectations that test results are indicative of future results. Generally, forward-looking statements can be identified by the use of words such as "plans", "expects" or "is expected", "scheduled", "estimates" "intends", "anticipates", "believes", or variations of such words and phrases, or statements that certain actions, events or results "can", "may", "could", "would", "should", "might" or "will", occur or be achieved, or the negative connotations thereof. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company, which could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such statements. These risks include, without limitation, political and regulatory risks associated with mining and exploration activities and approval of the environmental impact report, including potential community or political opposition or conditions on approval, environmental regulation, risks and uncertainties relating to the interpretation of testing and analytical results, risks related to the uncertainty of cost and time estimation and the potential for unexpected delays, costs and expenses for project development and operation, risks related to metal price fluctuations, the market for lithium products, and other risks and uncertainties related to the Company's prospects, properties and business detailed elsewhere in the Company's disclosure record, including, but not limited to, the risk factors described in the Company's revised annual information form for the year ended
SOURCE
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