Lithium Power International Ltd (ASX:LPI) has completed the definitive feasibility study (DFS) for its Maricunga Lithium Brine Project in northern Chile.
Using the DFS reserve estimate of 742,000 tonnes of lithium carbonate equivalent (LCE), the study supports 20,000 tonnes of production a year over 20 years.
The mineral resource estimate of indicated and measured resources totals 2.07 million tonnes of LCE.
With lithium recovery of 58%, the total production amounts to 430,000 tonnes which exceeds the 400,000 required for 20 years at 20,000 tonnes a year.
The company expects construction of the mine and production plant to begin in 2020 with first production in 2023.
Strong economics
Lithium Power chief executive officer Cristobal Garcia-Huidobro said the company was pleased to advise of the completion of the DFS with engineering company WorleyParsons.
The study estimates a leveraged net present value at 8% discount of US$1.3 billion, an internal rate of return of 29.8% and payback of 3.5 years.
Operating expenditure is US$3,772 a tonne, not including credits from a potassium chloride by-product which was not considered in the DFS.
The average battery-grade lithium carbonate price forecast over the operational life of the project will be US$14,400 a tonne, according to Roskill Consulting Group.
Total capital expenditure amounts to US$563 million, including indirect costs of US$45 million and contingency costs of US$63 million.
The maiden mining reserve estimate is compliant both with JORC and NI 43-101 guidelines and exceeds the project mine-life production estimate.
Financing and off-take discussions ongoing
Garcia-Huidobro said: “The strong economics detailed in the DFS confirms the project’s overall attractiveness as previously identified in the preliminary economic assessment study.
“The project, through its joint venture management company Minera Sala Blanco SA, is poised to advance to the next stages of development.
“Priorities will now shift to secure finance for the project and off-take agreements for the high-purity lithium carbonate output.”
Discussions to secure project development finance with major Chilean and international financial institutions have begun and are expected to be finalised this year.
Lithium Power also advises that approaches from international companies regarding off-take agreements and future participation have been received.
Regulatory rights secured
Rights to water and infrastructure for the project have been secured through long-term contracts for project construction and operation.
Access to the Chilean national power grid has been granted by the authorities and thus secured future power supply.
Lithium Power is also continuing to finalise all remaining licences, agreements and operational relationships with the Chilean government and other corporate bodies.