At full production, the PEA assumes that the company would produce 20,000 tonnes per year of battery-grade lithium carbonate and 5,000 tonnes per year of technical-grade lithium carbonate. Lithium is a key component of electric car batteries, and demand for these vehicles is set to surge.
The report estimates a mine life of 25 years with a three-year ramp up period. According to the firm, the operation plan for the PEA is based on the extraction of lithium-rich brine by a conventional well field, along with pumping operations and proven processing techniques.
“The results indicate that, even using the most conservative assumptions, Pastos Grandes has the potential to be a robust lithium carbonate project among the lower quartile of LCE costs,” said Farhad Abasov, president and CEO of Millennial Lithium.
The study points to an after-tax NPV of $824 million at an 8-percent discount rate, and an IRR of 23.4 percent after tax. Total CAPEX is pegged at $410 million, and OPEX per tonne of lithium carbonate stands at $3,218. The economic analysis was based upon brine grades across the company’s measured, indicated and inferred mineral resources only.
“We intend to continue advancing the project through the next phases of development, and continue driving further value improvements,” Abasov added.
The company plans to invest in advanced process test work, production-scale wells and a 3-tonne-per month pilot plant/training operation that will help advance further development.
Aside from Pastos Grandes, its flagship project, Millennial Lithium is advancing the Cauchari East project, adjacent to Orocobre’s (TSX:ORL) Olaroz mine and Lithium Americas’ (TSX:LAC,NYSE:LAC) in-development Cauchari project. It also owns the Pocitos North Cruz property in Argentina.
On Wednesday, Millennial Lithium’s share price closed down 2.88 percent, at C$4.05 in Toronto. That said, the company’s share price has been on an uptrend since the start of the year, and is up 10.66 percent year-to-date.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.