Anson Resources Ltd’s (ASX:ASN) (FRA:9MY) independent third-party engineering company Millcreek Mining Group has included the production of lithium carbonate in its preliminary economic assessment (PEA) for the Paradox Brine Project in Utah, US.
An updated PEA to accelerate the production of lithium chemicals to Phase 1 of the project follows a strategic review and recognition of changing market conditions for lithium.
The inclusion of lithium in the PEA adds $53 million to the Phase 1 pre-tax net present value (NPV) of the project.
Updated PEA
The updated PEA indicates high economic viability and return on investment due to the unique nature of the brine, which flows to surface under its own pressure with high concentration of a number of minerals, including bromine and lithium, which can be extracted from the same brine using the same supply and disposal infrastructure.
The PEA was based on production of 15,000 tonnes per annum (tpa) of sodium bromide and 2,465 tpa of lithium carbonate.
In addition to revenue from sodium bromide and lithium carbonate, revenue is expected to be earned from the sale of two by-products, 20,084 tpa caustic soda and 1,949 tpa hydrochloric acid.
Potential additional by-product revenue from production of boron (Boric Acid, H3BO3) and iodine were excluded from the economic analysis for the PEA as test-work for these potential by-products is not sufficiently advanced.
Project development funding
The company believes that there are reasonable grounds to assume that future funding will be available to commence the next stages of development, including in the near-term, in addition to later stages of development up to, and including Phase 2.
Anson has a number of funding options through equity, debt, offtake agreements and strategic investment to fund the development of the project, which are under active consideration.
The strong production and economic outcomes delivered by the PEA are considered to be sufficiently robust to provide confidence in Anson’s ability to fund pre-production capital through conventional debt and equity financing.
Anson has engaged with various international groups for strategic investments and offtake arrangements and to date these interactions have been positive.
This has informed Anson’s view of being able to secure the necessary funding for all phases of the project at times where the interest in financing these projects is expected to be high due to rising prices and market demand.
Project timetable
The project will require around two years of permitting, detailed engineering, and construction prior to the commissioning and operations of Phase 1.
The PFS will build from the PEA to further refine resources, engineering, and design of the processing facility and will be based on the following assumptions:
- Multiple drilling rigs will be used for the well drilling to accelerate the completion of the necessary drilling programs;
- The PoO work will not trigger the requirements for an Environmental Impact Statement;
- Baseline data necessary for the PoO process can be collected during one survey cycle and will not carry over into multiple years; and
- The project will not trigger the requirements for a major source air permit.