The report points to an annual production rate of 35,000 tonnes of lithium carbonate, a material that is key to the lithium-ion batteries used to power electric cars.
“The results highlight that the 3Q Project has the potential to become a significant low-cost lithium carbonate producer,” Constantine Karayannopoulos, Neo Lithium’s chairman, said in a statement.
3Q consists of a salar and brine reservoir complex, and was discovered by Neo Lithium last year. It is located in the Lithium Triangle, an area of Latin America that is characterized by high-altitude salt flats, some of which contain elevated lithium concentrations.
By-products, such as potash, calcium chloride and boric acid, are not included in the PEA, but according to the company could add potential value to 3Q in the future.
“We are very pleased to have advanced this project from discovery to PEA in less than two years,” said Waldo Perez, president and CEO of Neo Lithium. “We will continue to rapidly advance our wholly owned 3Q Project with a view to a full feasibility study towards the end of 2018 along with project finance, and mine construction soon thereafter.”
According to the PEA, the estimated mine life for 3Q is 20 years, with a three-year ramp-up period that will start in 2021. The study indicates a NPV of $1.13 billion after tax at an 8-percent discount rate and an IRR of 24.4 percent after tax. Total CAPEX is pegged at $588.7 million, and cash operating costs per tonne of lithium carbonate stand at $2,791.
In May, Neo Lithium published a resource estimate for 3Q showing measured and indicated resources of 714,242 tonnes of lithium carbonate equivalent at an average grade of 716 mg/L. Its inferred resource stands at 1,339,546 tonnes of lithium carbonate equivalent at an average grade of 713 mg/L lithium.
Argentina is the world’s third-largest lithium producer, and 3Q is located near the largest brine lithium mines and projects in the world, including SQM (NYSE:SQM) and Albermarle’s (NYSE:ALB) Atacama salar, Orocobre (TSX:ORL) and Lithium Americas’ (TSX:LAC) Cauchari-Olaroz salar and FMC (NYSE:FMC) and Galaxy Resources’ (ASX:GXY) Hombre Muerto salar.
On Monday, Neo Lithium’s share price was up almost 2 percent, trading at C$2.09 in Toronto. The company’s share price has jumped more than 95 percent year-to-date.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Neo Lithium is a client of the Investing News Network. This article is not paid-for content.