The inclusion of byproducts, including quartz, feldspar and mica, has delivered “substantial economic benefits” to the north Carolina lithium project that ASX-listed Piedmont Lithium is studying in the US.
An updated scoping study determined that the recovery and selling of byproducts that are inherent in the orebody will provide credits to the cost of lithium production. The new study estimates that concentrate costs will be $193/t and lithium hydroxide costs $3 112/t, net of byproducts and inclusive of royalties.
The July 2018 scoping study estimated lithium hydroxide operating costs of $3 960/t.
The updated scoping study, published this week, continues to propose a 22 700 t/y chemical plant, supported by a mine/concentrator producing 170 000 t/y of 6% lithium oxide spodumene concentrate, but includes 99 000 t/y of quartz production, 125 000 t/y feldspar production and 15 500 t/y of mica output.
The initial Stage 1 capital expenditure (capex) of the updated scoping study is higher at $109-million for the mine/concentrator and byproduct circuits, compared with the previous estimate of $91-million for a mine and concentrator.
The Stage 2 capex for the chemical plant will be funded largely by internal cash flow.
The inclusion of byproducts improved the earnings before interest, tax, depreciation and amortisation (Ebtida) from a previous estimate of $220-million a year to between $225-milion and $245-million a year, and the after-tax cash flow estimate by $10-million a year to between $180-million and $190-million a year.
The estimated net present value (NPV) of the updated scoping study is $888-million and the after-tax internal rate of return (IRR) of 46% with a two-year payback, compared with a NPV of $777-million and an IRR of 56%.
“The economic benefit of developing an integrated lithium chemical business in north Carolina is clear, driven by the exceptional infrastructure and human resources advantages of our location, as well as the competitive royalty and tax regime offered in the US. We will now focus on continued growth in our land position and resource base, advancing toward permit submittals in late-2018, and refining project economics as part of a prefeasibility study,” president and CEO Keith Phillips commented.
The prefeasibility study will be completed in the second quarter of 2019.