MONTRÉAL, QC / ACCESSWIRE / August 29, 2023 / Critical Elements Lithium Corporation (TSX-V:CRE)(OTCQX:CRECF, Financial)(FSE:F12) ("Critical Elements" or the "Corporation") is pleased to announce the results of a new Feasibility Study on the Rose Lithium-Tantalum project ("Rose" or the "Project") in Eeyou Istchee James Bay, Québec.
The management of Critical Elements, with its new highly qualified technical team led by Yves Perron as Vice President of Engineering, Construction and Operations, brings a deep level of knowledge and expertise to the engineering process (particularly in mining operations, process, environment, design, estimation and project control). This new study replaces the Feasibility Study announced by the Corporation on June 13, 2022. Noteworthy changes include: (i) the increased indexation of industrial construction prices, (ii) the addition of certain process equipment to increase operational reliability and (iii) the addition of the scope change of the Project by incorporating the construction of our own 500-worker camp 4 km from the mine site. The new camp has been added to reduce the execution risk and timeline as this is vital to having the workers' accommodation ready in time as we increase the speed of the construction phase. The new 500-room camp includes both temporary and permanent sections (approximately 250 rooms for each section).
Jean-Sébastien Lavallée, Chief Executive Officer of the Corporation, said: "We are very pleased to announce the results of the new Definitive Feasibility Study at Rose to provide the updated economics of the Project. The study reaffirms the substantial value of Rose - amongst the backdrop of higher input costs and the decision to build our own 500-worker camp - to establish Critical Elements as a reliable, high-quality supplier of lithium. Thank you to our engineers, management team and local stakeholders for their diligent efforts and our shareholders for their continuous support."
Highlights
Expected 17-year mine lifeAverage production Year 2-17: 157,706 tonnes of chemical grade 5.56% spodumene concentrateAverage production Year 2-17: 46,059 tonnes of technical grade 6.16% spodumene concentrateAverage production Year 2-17: 580 tonnes of tantalum concentrateAverage operating costs: US$81,30 per tonne milled, US$587 per tonne of concentrate (all concentrate production combined)Estimated initial capital cost: US$471 million (before working capital)Average gross margin: 78.8%After-tax NPV8% of US$2,195 million, after-tax IRR of 65.7%Anticipated construction time: 21 months to start of productionAverage price assumptions of US$4,699 per tonne technical grade lithium concentrate, US$2,162 per tonne chemical grade lithium concentrate and US$150 per kg tantalum pentoxide (Ta2O5)The Rose Lithium-Tantalum Project is 100%-owned by Critical Elements. The Corporation's market strategy is to enter the lithium market with a low-risk approach. The completion of the Feasibility Study on the spodumene plant is the first step to entering the market and establish the Corporation as a reliable high-quality lithium supplier. The low-risk approach is characterized by simple open-pit mining and conventional lithium processing technologies.
Critical Elements has consistently sought to advance the wholly-owned Rose Lithium-Tantalum Project in a low-risk manner. To this end, the Corporation has completed a new Feasibility Study with a conservative spodumene concentrate price deck, as well as capital and operating cost estimates reflective of current market conditions. The new Feasibility Study incorporates a standard truck and shovel open-pit mining operation and conventional lithium processing technologies. The Project will produce technical grade spodumene concentrate for the glass and ceramics industry and chemical grade spodumene concentrate for conversion for use in batteries for e-mobility, as well as a tantalite concentrate.
The mine will excavate a total of 26.3M tonnes ore grading an average of 0.87% Li2O and 138 ppm Ta2O5 after dilution. The mill will process 1.61M tonnes of ore per year to produce an annual average of 203,765 tonnes of technical and chemical grade spodumene concentrates and 580 tonnes of tantalite concentrates. The ore is contained in several parallel and continuous shallow dipping pegmatite dykes outcropping on surface. The ore zones are open at depth and a future underground operation is possible.
Over the life of mine, the open pit will excavate a total of 182.4M tonnes of waste rock and 10.9 M tonnes of overburden. The average strip ratio is 7.3 tonnes of waste per tonne of ore.
Table 1 Rose Key FS Results
ItemUnits
Value
Production Project Life (from start of construction to closure)years
19
Mine Lifeyears
17
Total Mill Feed tonnageM t
26.3
Average Mill Feed grade Li2O% Li2O
0.87
Ta2O5ppm Ta2O5
138
Lithium Concentrate Production % of Production, Chemical Grade%
75
% of Production, Technical Grade%
25
Mill Recoveries Li2O, Chemical Grade%
87.4
Li2O, Technical Grade%
84.8
Ta2O5%
54.4
Concentrate grade Li2O, Chemical Grade%
5.56
Li2O, Technical Grade%
6.16
Ta2O5 Grade%
20.00
Payable 5.56% Li2O Concentrate, Chemical Gradet
2,681,000
6.16% Li2O Concentrate, Technical Gradet
783,000
Ta2O5 Contained in Concentratekg
1,971,000
Commodity Prices 5.5% Li2O Concentrate, Chemical GradeUS$/tconc.
2,162
6% Li2O Concentrate, Technical GradeUS$/tconc.
4,699
Ta2O5 Contained in ConcentrateUS$/kgcontained
150Exchange rate 1.00 US$ : 1.30 CAN$
0.77 US$ : 1.00 CAN$
ItemUnits
Value
Value
Project CostsCA$
US$
Average Mining Cost$/t milled
35.13
27.05
Average Milling Cost$/t milled
27.00
20.79
Average General & Administrative Cost$/t milled
20.70
15.94
Average Concentrate Transport Costs$/t milled
22.76
17.52
Project EconomicsCA$
US$
Gross Revenue$M
12,692
9,772
Total Selling Cost Estimate$M
161
124
Total Operating Cost Estimate$M
2,776
2,137
Total Sustaining Capital Cost Estimate$M
310
239
Total Capital Cost Estimate$M
611
471
Duties and Taxes$M
3,688
2,840
Average Annual EBITDA$M
599
461
Average Gross Profit Margin%
78.8%
Pre-Tax Cash Flow$M
8,835
6,803
After-Tax Cash Flow$M
5,147
3,963
Effective Tax Rate%
41.7%
Discount Rate%
8.0%
Pre-Tax Net Present Value @ 8%$M
5,048
3,847
Pre-Tax Internal Rate of Return%
95.9%
Pre-Tax Payback Periodyears
1.3
After-Tax Net Present Value @ 8%$M
2,851
2,195
After-Tax Internal Rate of Return%
65.7%
After-Tax payback Periodyears
1.8
Property
The Rose property is located in northern Québec's administrative region, on the territory of Eeyou Istchee James Bay. It is located on Category III land, on the Traditional Lands of the Eastmain Community, approximately 40 km north of the Cree village of Nemaska. The latter is located approximately 300 km north-west of Chibougamau.
The Rose property is accessible by road via the Route du Nord, usable all year round from Chibougamau. The mine site can also be reached by Matagami, via Route 109 and Route du Nord. Figure 1 displays the regional location of the project. The project is located 80 km south of Goldcorp's Éléonore gold mine and 45 km north-west of Nemaska's Whabouchi lithium project and 20 km south of Hydro Québec's Eastmain-1 hydroelectricity generating plant. The Nemiscau airport services the region's air travel needs. The Rose property site is located 50 km by road from the Nemiscau airport.
The Rose property comprises 473 claims spread over a 24,654-ha area. Geologically, the Rose property is located at the north-east end of the Archean Lake Superior Province of the Canadian Shield.
Figure 1 Rose Property Location
Reserve Estimate
A Mineral Reserve Estimate for 17 mineralized zones was prepared during this study. The estimation assumed the production of a chemical grade spodumene concentrate with a price of US$20 per kg Li2O and a tantalite concentrate with a price of US$130 per Kg of Ta2O5. The recoveries were fixed at 85% and 64% for lithium and tantalum, respectively. The grade-recovery curve used for resource estimate, which became available after the mineral reserves were evaluated, was verified and found to have little influence on the reserve estimate. The production of a higher value technical grade spodumene concentrate was not assumed in the reserve estimate.
Based on compilation status, metal price parameters, and metallurgical recovery inputs, the effective date of the estimate is August 1st, 2023.
The estimate was prepared in accordance with CIM's standards and guidelines for reporting mineral resources and reserves.
Table 2 displays the results of the Mineral Reserve Estimate for the Rose Project at the CA$44.80 NSR per tonne cut-off for the open-pit scenario.
Table 2 Mineral Reserve Estimate
Tonnage
NSR
Li2O_eq
Li2O
Li2O
Ta2O5
Ta2O5
Category
(Mt)
(CA$)
(%)
(%)
(000 t)
(ppm)
(000 t)
Probable26.3
165
0.92
0.87
193,8
138
2,3
Total26.3
165
0.92
0.87
193,8
138
2,3
The Independent and Qualified Person for the Mineral Reserve Estimate, as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Project ("NI 43-101"), is Simon Boudreau, P.Eng, of InnovExplo Inc. The effective date of the estimate is August 1st, 2023.The model includes 17 mineralized zones.Calculations used metric units (metres, tonnes and ppm).The number of metric tons was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects. Rounding followed the recommendations in NI43‑101.InnovExplo is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect the Mineral Reserve Estimate.Resource Estimate
The current Mineral Resource Estimate ("MRE") is primarily based on changes made to the net smelter return ("NSR") parameters, supported by new assumptions concerning metal prices and the creation of potentially mineable shape to constrain the MRE for the potential underground extraction scenario. No changes to the interpretation and interpolation parameters were deemed necessary. The mineral resource model for the current MRE is based largely upon the model generated for the 2011 PEA.
The effective date of the estimate is August 1st, 2023, based on compilation status, metal price parameters, metallurgical recovery inputs and creation of the constraining volume.
Given the density of the processed data, the search ellipse criteria, the drill hole density and the specific interpolation parameters, the Qualified Persons is of the opinion that the current MRE can be classified as Indicated and Inferred resources. The estimate was prepared in accordance with CIM's standards and guidelines for reporting mineral resources and reserves.
Table 3 displays the results of the MRE for the Rose Project using CA$31.40 NSR/t cut-off for the open-pit potential extraction scenario and CA$121.12 NSR cut-off for the underground potential extraction scenario.
Table 3 Mineral Resource Estimate
Category
Tonnage
NSR
Li2O_Eq
Li2O
Ta2O5
(CA$)
(%)
(%)
(ppm)
Indicated
Pit
29,922,000
185
1.03
0.93
145
Underground
624,000
177
0.96
0.91
82
Total Indicated
30,561,000
185
1.03
0.93
118
Inferred
Pit
1,787,000
149
0.86
0.77
138
Underground
597,000
150
0.87
0.80
101
Total Inferred
2,384,000
149
0.86
0.78
129
The Independent and Qualified Person for the Mineral Resource Estimate, as defined by NI 43-101, is Carl Pelletier, P.Geo., of InnovExplo Inc. The effective date of the estimate is August 1st, 2023. The MRE follow 2014 CIM Definition Standards and the 2019 CIM MRMR Best Practice Guidelines.These Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability.The model includes 24 mineralized zones.The reasonable prospect for eventual economic extraction is met by having constraining volumes applied to any blocks (potential open -pit or underground extraction scenario) using Whittle and the Deswik Stope Optimizer (DSO) and by the application of cut-off grades. The mineral resource is reported at a cut-off of CA$31.40 NSR for the open-pit potential; and of US$121.12 NSR for the underground potential based on market conditions (metal price, exchange rate and production cost).A range of densities was used on a per-zone basis based on statistical analysis of all available data.A minimum true thickness of 2.0 m was applied, using the grade of the adjacent material when assayed or a value of zero when not assayed.High grade capping was done on raw assay data based on the statistical analyses of individual mineralized zones.Compositing was done on drill hole intercepts falling within mineralized zones (composite lengths vary from 1.5 m to 3 m to distribute the tails adequately).Resources were evaluated from drill holes using a 2-pass OK interpolation method in a block model (block size = 5 m x 5 m x 5 m).The inferred category is only defined within the areas where blocks were interpolated during pass 1 or pass 2 where continuity is sufficient to avoid isolated blocks being interpolated by only one drill hole. The indicated category is only defined by blocks interpolated by a minimum of two drill holes in areas where the maximum distance to the closest drill hole composite is less than 40 m for blocks interpolated in pass 1.Results are presented in-situ. The number of metric tons was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects. Rounding followed the recommendations in NI 43‑101.The qualified persons are not aware of any known environmental, permitting, legal, title-related, taxation, socio-political or marketing issues, or any other relevant issue, that could materially affect the potential development of mineral resources other than those discussed in the MRE.Feasibility Study
The parameters used for the Feasibility Study are the following:
Open pit mining rate of 1,610,000 tpy of oreSpodumene process plant with a 4,600 tpd capacityMining Operation
The mineralization is hosted within outcropping pegmatite dykes subparallel to surface. The ore body is relatively flat, close to surface and comprised of north oriented stacked lenses. Mineralization recognized to date on the Rose property includes rare elements of Lithium-Cesium-Tantalum or LCT-type pegmatites and molybdenum occurrences.
A conventional truck and shovel open-pit approach was considered to mine the Rose Lithium-Tantalum Project's Probable Mineral Reserves. The dimensions of the engineered pit design are approximately 1,620 m long x 900 m wide x 220 m deep.
The life of mine plan (LOM) proposes to mine 26.3 Mt of ore, 182.4 Mt of waste, and 10.9 Mt of overburden for a total of 219.6 Mt of material. The average stripping ratio is 7.3 tonnes of waste per tonne of ore. The nominal production rate is estimated at 4,600 tonnes per day and 350 operating days per year.
The mining operation production rate is set to approximately 15 Mt of material per year. An open pit mining schedule was planned and resulted in a mine life of 17 years.
Contract mining will be used for the removal of the overburden while Critical Elements will undertake the mining of all hard rock material with its own equipment fleet and operators.
The main production fleet will consist of one (1) backhoe excavator, one (1) electric front shovel, one (1) wheel loader, eight (8) haul trucks (65t each), seven (7) haul trucks (135t each), two (2) rotary drills, one (1) DTH drill, two (2) bulldozers, one (1) wheel dozer, two (2) graders, one (1) auxiliary excavator, one (1) auxiliary wheel loader, and two (2) water trucks.
The Rose project pit was designed with a 10 m single benching arrangement. A 57° inter-ramp angle and an overall pit slope angle of 55° were utilized for the ultimate pit design. A berm width of 7.0 m corresponding to the recommended overall slope angle was used. The pit slopes in overburden have a face ratio of 2.5:1 with a 10 m berm width.
The main in-pit haulage ramp is designed at 30.9 m wide to allow a double-lane traffic, except for the last benches at the pit bottom that are designed at 20.4 m wide for single lane traffic. A 2 m drainage ditch is included to allow for water drainage and pipe installation. The maximum gradient of the inner curvature of all ramp segments is 10%.
Figure 2 Rose Pit Plan View
Figure 3 Rose Pit Side View Looking West
Mineral Processing
A standard froth flotation process will be utilized to produce technical grade and chemical grade lithium concentrates and a tantalum concentrate. The mineral process plant will consist of crushing, beneficiation, and dewatering areas. The technical grade lithium concentrate will grade 6.16% Li2O while the chemical grade lithium concentrate will grade 5.56% Li2O. The tantalum concentrate will grade 20% Ta2O5.
The beneficiation process includes crushing, grinding, magnetic separation and flotation. The crushing circuit will consist of a jaw crusher and two (secondary and tertiary) cone crushers, and screens. The crushed ore will have a P80 of 13 mm and will be stockpiled in a 24-hour live capacity dome. The grinding circuit will consist of a ball mill operating in a closed circuit with a set of cyclones. The tantalum will first be recovered at a grade of 2.0% Ta2O5 by high intensity magnetic separation then upgraded further to 20.0% Ta2O5 by gravity separation. Tantalum concentrate will be thickened, filtered, dried to 1% moisture, and bagged for shipment. The lithium flotation circuit will include removal of slimes (particles less than 20 um) after magnetic separation followed by mica flotation, scrubbing, and spodumene flotation to the required grades. The spodumene concentrate will then be thickened, pressure filtered with a 5% moisture content, and stored in a dome with a capacity of 24 hours and then be transported by trucks and trains to the port. The flotation tailings will be thickened, vacuum filtered to 15% moisture or less, and trucked to the waste rock / tailings piles where it will be dry stacked.
The spodumene plant will operate 24 hours per day, 7 days per week, and 52 weeks per year. The process plant was designed with an operating availability of 90%. The crushing circuit was designed using an operating availability of 50%. The plant has a capacity of 1,610,000 tonnes per year or 4,900 dry tonnes per day including availability.
The process plant flowsheet developed by Bumigeme Inc. is presented in Figure 4.
Figure 4 Rose Process Flowsheet
Metallurgy
Bench scale metallurgical testing was performed at ACME Metallurgical Limited in Vancouver in 2011. The results from these tests were used for the PEA study. Three composites: the Rose (main structure), the Rose Sud-Est (Southeast structure), and Tantalum (secondary structure with higher tantalum and lower lithium content) were subjected to various metallurgical tests.
SGS Canada Inc. in Lakefield conducted tests from 2013 to 2015 to improve lithium and tantalum recoveries. In 2015 SGS Canada Inc. developed a conceptual flowsheet based on a series of bench scale tests on various samples from the Rose deposit. The proposed flowsheet consists of conventional three-stage crushing and single stage grinding followed by magnetic separation for the recovery of tantalum, mica flotation, and spodumene flotation. This flowsheet was the basis of the process plant design.
SGS Canada also conducted a pilot plant program in early 2017 on two samples from the Rose project (Rose and Rose South). The main objective of the pilot plant program was to generate spodumene concentrate for testing in a lithium carbonate pilot plant which was conducted by Outotec in Germany and Finland. Secondary objectives were to prove metallurgical performance on a continuous pilot scale and to generate metallurgical and operating data for further studies. The spodumene pilot plant demonstrated the robustness of the design process.
The Feasibility Study assumes 84.8% and 87.4% recovery for technical and chemical grade lithium concentrates respectively and 54.4% minimum recovery for the tantalum concentrate.
Process water will be recycled releasing minimal amounts to the retention pond and final effluent treatment plant.
Environmental and Social Impact Assessment
The final environmental impact assessment (EIA) was submitted to the governments of Canada and Quebec in February 2019. In August 2021, Critical Elements announced that the Federal Minister of Environment and Climate Change had rendered a favorable decision in respect of the proposed Rose Project. In a Decision Statement, which included the conditions to be complied with by the Corporation, the Minister confirmed that the Project is not likely to cause significant adverse environmental effects when mitigation measures are taken into account.
In September 2022, the Environmental and Social Impact Review Committee, an independent body composed of members appointed by the governments of Quebec and the Cree Nation responsible for the assessment and review of the environmental and social Impacts of the Project, recommended that the Project be authorized. Consequently, the Corporation received the Certificate of Authorization pursuant to section 164 of Quebec's Environment Quality Act for the Project from the Quebec Minister of the Environment, the Fight against Climate Change, Wildlife and Parcs. Now that the Project has been approved by government authorities, the Corporation must obtain the various permits required to build and operate the mine. In addition, a new development has been added to the project: the workers' camp, previously planned 25 km to the north, is expected to be set up some 4 km south of the mine site, under CELC's responsibility.
Critical Elements has been working since the beginning with the Eastmain Community, on whose Traditional Lands the Project lies. The Corporation has also maintained good relations with the Grand Council of the Cree and with the neighbouring Nation of Nemaska. Consultations have been ongoing and are planned throughout the life of the Project. In 2019, Critical Elements entered into an impact and benefits agreement with the Cree Nation of Eastmain, the Grand Council of the Cree (Eeyou Istchee), and the Cree Nation Government called the Pihkuutaau Agreement.
The Corporation's mine closure and restoration plan was accepted by the Ministry of Energy and Natural Resources of the Province of Québec (MERN) in April 2022.
Infrastructure
The Project infrastructure includes site main access, services and haulage roads, explosive and detonator storage, a spodumene processing plant, a maintenance facility, a warehouse, diesel and gasoline storage, ore stockpile, waste rock and dry tailings co-disposal stockpile, overburden stockpile, main electrical substation and distribution, fresh and potable water supply, sewage, surface water management, final effluent treatment, communication system, gate house, and an administrative building. A camp complex will be built near the junction between the site access and Eastmain 1 road.
The mine site layout is shown in Figure 5.
Figure 5 Rose Site Layout
Waste rock and tailings samples were analyzed, and both were considered to be non-potentially acid generating. The dry tailings and the waste rock will be stored in the same facility which has sufficient capacity for the life of mine. Rain and snow melt water will be collected in ditches and pumped to the water treatment plant.
The industrial pad has an area of 254,000 m2 and will contain the process plant, the maintenance facility, warehouse, administration building, diesel and gasoline storage tanks, and all associated services. The ore pad will have an area of 105,000 m2 where low-grade material may be stored.
The hydrology study has suggested that water inflow to the open pit is to be expected. To maximize pit slopes, water wells will be constructed around the pit periphery to lower the water table below the pit floor. One of these wells will be used to supply the site with fresh water. Water from the other wells will be directed to sedimentation ponds and treated, if necessary, before being released to the effluent.
Water from the waste rock / dry tailings stockpile, the open pit, the industrial pad, the overburden stockpile, and the roads will be collected in an equalization pond and treated before being released as final effluent.
The mine site will have a 2.7 km main access road from the Eastmain 1 road to the industrial pad. Including the service roads, the site will total 16 km of roads.
A 315 kV electrical transport line (L3176), owned by Hydro‑Québec, runs North-South over the eastern side of the Rose Property. It runs over the planned open pit. The portion running over the open pit representing 4.2 km will be rerouted to allow open pit operation.
Figure 6 Power Line at Rose Site
Capital Costs
The capital and operating costs were estimated in Canadian dollars. An economic analysis was conducted with a discounted cash-flow before and after tax. The initial capital cost is estimated at US$471including all infrastructures described earlier with a 10% contingency. The sustaining capital is estimated at US$238M over the life of mine.
The total payable products are estimated at 2,681,000 tonnes of chemical grade 5.56% Li2O concentrate, 783,000 tonnes of technical grade 6.16% Li2O concentrate, and 1,971 tonnes of 20% Ta2O5 concentrate.
Table 4 Initial Capital and Sustaining Capital Costs
Item
Initial
Capital (C$M)
Sustaining
Capital (C$M)
Initial
Capital (US$M)
Sustaining
Capital (US$M)
365.4
254.0
281.4
195.6
Mine Open Pit7.6
207.5
5.8
159.8
Stockpiles7.0
19.2
5.4
14.8
Infrastructure108.9
14.2
83.8
10.9
Process Plant166.8
10.4
128.4
8.0
Auxiliary Buildings & Equipment75.2
2.7
57.9
2.1
Indirect Capital Estimate189.1
0.5
145.6
0.4
Owner's Costs77.7
-
59.9
-
Indirect Costs111.4
0.5
85.8
0.4
Contingency55.5
25.4
42.7
19.6
Mine Rehabilitation (Incl. Contingency)-
21.7
-
16.7
Mine Rehabilitation Bond & Costs1.2
7.2
0.9
5.6
Total Capital Estimate611.2
308.9
470.6
237.8
The waterfall chart of figure 7 illustrates the capital costs differences between 2022 and 2023 feasibility studies in US$.
Figure 7 Waterfall Chart Capital Costs 2022 vs 2023
Operating Costs
The operating costs are estimated at US$81.30 per tonne of ore processed which include:
Mining: US$27.05 per tonne processedProcessing: US$20.79 per tonne processedG&A : US$15.94 per tonne processedConcentrate transportation: US$17.52 per tonne processedThe total operating costs are estimated at US$587/tonne of concentrate after Tantalite Credit, as summarized in Table 5.
Table 5 Operating Costs per Tonne of Concentrate
Item
C$/t All Concentrate
US$/t All Concentrate
Mining266
205
Processing205
158
General and Administrative157
121
Transportation Concentrate173
133
Total Operating Costs801
617
SG&A10
8
Royalties37
28
Total Operating Costs (Incl. SG&A and Royalties)847
652
Less: Tantalite Credit85
66
Total Operating Costs (After Tantalite Credit)762
587
Energy unit costs are estimated to CA$0.055 per kWh for electricity and CA$1.35 per litre for diesel.
Figure 8 displays the waterfall chart of the operating cost details.
Figure 8 Waterfall Chart Operating Costs
Project Economics
The mine will process 1,610,000 tonnes ore per year grading an average of 0.87% Li2O and 138 ppm Ta2O5 over a period of 17 years. Over the Life of Mine (LOM), the averages for the price assumptions are US$2,162 per tonne and US$4,699 per tonne of chemical grade and technical grade lithium concentrates respectively (FOB port) and US$150 per kg Ta2O5 contained in the tantalum concentrate (FOB mine site).
Figure 9 displays the prices per year for the lithium concentrate products.
Figure 9 Concentrate Selling Price Per Year
The price deck applied to the current feasibility study is as conservative or more so than the price deck applied to the previous feasibility study. For example, the LOM average chemical grade lithium concentrate price in the previous feasibility study (US$1,852/t) sat at a 47% discount relative to the trailing twelve months' average of US$3,525/t. This compares to the current feasibility study in which the LOM average chemical grade lithium concentrate price sits at US$2,162/t, which is a 65% discount relative to the trailing twelve months' average of US$6,107/t.
The pre-tax and after-tax NPV at various discount rates are presented in Table 6.
Table 6 Pre-Tax and After-Tax NPV
Discount Rate
Pre-Tax (C$M)
After-Tax (C$M)
Pre-Tax (US$M)
After-Tax (US$M)
NPV @ 0%
8,835
5,147
6,803
3,963
NPV @ 5%
6,137
3,511
4,726
2,704
NPV @ 8%
5,048
2,851
3,887
2,195
NPV @ 10%
4,467
2,499
3,439
1,924
NPV @ 12%
3,975
2,201
3,061
1,695
The after-tax internal rate of return is 65.7%.
Sensitivity Analysis
The sensitivity of the NPV to exchange rate and chemical grade lithium concentrate price is presented in Table 7.
Table 7 After-Tax NPV Sensitivity to Exchange Rate and Chemical Grade Lithium Concentrate
Exchange Rate
After-Tax NPV8% Discount Rate (C$M)
Li2O Price - Chemical Grade
-40%
-20%
Base Case
5%
10%
-10%
710M
1,415M
2,105M
2,278M
2,450M
Base Case
1,144M
1,978M
2,806M
3,012M
3,218M
10%
1,206M
2,052M
2,892M
3,101M
3,311M
Figures 10 to 12 present the sensitivity of the NPV at 8% discount rate, the waterfall chart for NPV comparison between 2022 and 2023 studies, and IRR to prices, Li2O recovery, exchange rate, operating costs, and capital cost. The economics are most sensitive to Li2O price, exchange rate, and Li recovery.
Figure 10 Sensitivity on After-Tax NPV 8%
Figure 11 Sensitivity on After-Tax IRR
Figure 12 Waterfall chart Post-Tax NPV 2022 versus 2023
Lithium Demand Outlook
