Proactive Investors - Run By Investors For Investors

Piedmont Lithium drilling to upgrade resource and extend life for US lithium project

Piedmont Lithium has been buying up land in North Carolina to extend the size of the Piedmont project.
North Carolina sign
Carolina's lithium belt hosted two large lithium mines in the 1950s to 1990s
  • Drilling underway to upgrade resource base and extend project life
  • Permit applications with US Army Corps of Engineers and North Carolina Division of Water Resources
  • Continued land-buys to increase project size
  • A potential source of locally-sourced US lithium

What does Piedmont Lithium do?

Piedmont Lithium Ltd (ASX:PLL) specialises in exploration and development on the world-class Carolina Tin-Spodumene Belt in the United States. It is run by Keith D Phillips, a 30-year mainstay on Wall Street who worked on more than US$100 billion of transactions and boasts experience leading mining investment teams at Merrill Lynch (NYSE:MER-K) and JPMorgan (NYSE:JPM) (LON:JESC) (NYSEARCA:AMJ) (LON:JII) on his CV.

What does Piedmont Lithium own?

The key asset is the wholly-owned Piedmont Lithium Project which lies in North Carolina on a lithium belt home to two historical lithium mines run from the 1950s to the 1990s.

This lithium exploration belt has easy access to power and infrastructure, including two processing plants opened during the region’s lithium heyday.

These plants continue to supply product to US customers and are just 20 kilometres from the Piedmont project.

The company, established three years ago by investment company Apollo Group, hopes to fast track development of the project and become a domestic supplier to local markets in a Tier 1 jurisdiction valuing energy security for battery metals.

Piedmont Lithium hopes to capitalise on an expected global shortfall of lithium as demand heats up and aims to progress plans to produce lithium hydroxide, which attracts higher prices.

The company updated a scoping study for its namesake project in September last year, increasing the value of the project by 14% to an after-tax US$888 million (A$1.25 billion) using a net present value (NPV8) calculated at an 8% discount.

The corresponding internal rate of return was an after-tax 46%, with lithium hydroxide cash costs of US$3,960 a tonne for a two-year payback.

Battery-grade lithium hydroxide monohydrate grading at least 56.5% was 100,000-110,000 yuan (US$14,826-16,308) a tonne in late December.

Piedmont Lithium’s scoping study came after a high-grade mineral resource was identified last June.

Resources factored into the study were 16.2 million tonnes at 1.12% lithium.

Steady-state spodumene concentrate production was forecast at 170,000 tonnes a year grading 6% lithium for a steady-state 22,700 tonnes a year of lithium hydroxide over a 13-year project life.

Piedmont Lithium has restarted drilling the project, undertaking a 25,000-metre phase IV program aimed at incxreasing resource and expanding project life.

The company has been consolidating its landholdings at the project, increasing its ground by 15% in the December quarter to 1,383 acres.

Drill targets from the new properties are a part of the drilling program underway.

Piedmont Lithium raised $12.2 million (US$8.7 million) from a placement which had its last tranche, of $400,000, come in this month.

This placement will fund infill drilling to expand and upgrade its project resource base, permit applications, pilot-scale metallurgy, extra engineering studies and more land consolidation.

Piedmont Lithium plans to spend US$4 million in the March quarter, earmarking US$2.9 million for exploration and evaluation.

The company hopes to later produce a feasibility study for the project.

Inflection points

  • Upgrade to resource base to extend forecast mine life

  • Key regulatory approvals, including already-submitted permit applications

  • US Government decision-making on the importance of locally-sourced lithium for the nation’s national security

  • Metallurgical test work results and lithium concentrate qualities and consistencies

  • Feasibility study delivery schedules and funding

  • Access to infrastructure, including local plant capacity

President & CEO Keith D Phillips confident of the value of project

“We are very pleased with the results of the updated scoping study, which incorporates the substantial economic benefits of recovering and selling the by-products quartz, feldspar and mica that is inherent in our ore body,” Piedmont president & CEO Keith D Phillips said.

“The economic benefit of developing an integrated lithium chemical business in North Carolina, USA, is clear, driven by the exceptional infrastructure and human resource advantages of our location, as well as the competitive royalty and tax regime offered in the United States.”

View full PLL profile View Profile

Piedmont Lithium Ltd Timeline

Related Articles

Open pit operations have focused on Matilda
January 27 2019
Reserve expansions and a Wiluna expansion DFS are upcoming milestones.
Lithium cube
December 07 2018
The resource exploration and development company looks to supply the rapidly growing lithium-ion battery industry for both mobile devices and laptops, as well as the burgeoning electronic-vehicle industry
Lithium Australia aspires to ‘close the loop’ on the energy-metal cycle
March 12 2019
Recent results show high-quality lithium-ion batteries can be generated from mine waste using its process.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use