Lithium Power International has released a definitive feasibility study for its Maricunga lithium brine project in Chile.
Lithium Power International (ASX:LPI) has released a definitive feasibility study (DFS) for its Maricunga lithium brine project, which is set to produce 20,000 tonnes per year of lithium carbonate equivalent (LCE) over its 20-year mine life.
The DFS outlines a reserve estimate of 742,000 tonnes of LCE — 203,000 tonnes proved, 539,000 tonnes probable — and the project’s resource has been upgraded to 2.07 million tonnes of LCE, all of which are classified as measured or indicated.
The company predicts Maricunga’s total capital expenditure, including direct development, contingencies and indirect costs, will rack up a bill of US$563 million. However, the project’s net present value is set at US$1.302 billion before tax at an 8-percent discount rate, setting the internal rate of return at 29.8 percent, with a payback period of 3.5 years.
Lithium Power CEO Cristobal Garcia-Huidobro commented on the release of the DFS, explaining that the priority going forward will be on securing financing and offtake agreements.
“The strong economics detailed in the DFS confirms the project’s overall attractiveness as previously identified in the Preliminary Economic Assessment (PEA) study,” he said in a statement.
“The project, through its joint venture management company, Minera Salar Blanco S.A., is poised to advance to the next stages of development.”
Project financing has been discussed with major Chilean and international financial institutions, and is predicted to be finalized sometime this year.
It is expected that mine and lithium production plant construction will start in 2020, with first lithium production planned for 2023. Managing company Minera is currently waiting on Chilean government officials to review the environmental impact assessment for the project, submitted in Q4 2018.
Located in Northern Chile, Maricunga is situated among some of the largest and highest-grade lithium brine mines in the renowned lithium triangle, which connects with Bolivia and Argentina.
According to Lithium Power, the project is considered one of the highest-quality pre-production lithium brine development projects in the world.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.