European Metals said an update on its pre-feasibility study for the Cinovec lithium project in the Czech Republic had increased its potential value by 75%.
Incorporating changes to the mining process into the 2019 PFS had increased the estimate of annual production by 16% to 29,400 tonnes of lithium hydroxide, while the value (NPV) rises to US1.94bn from US$1.1bn.
Project operator Geomet changed the planned mining method for the Cinovec orebody from open stoping to longhole stoping with backfill using paste backfill.
“This change, together with other changes to the material assumptions outlined in this update, increases the Cinovec mine's proposed ore extraction from 34.5mt up to 54.5mt enabling an increase in the annual processing rate by approximately 33% per annum over the previous 21-year life of mine, from 1.69mtpa to 2.25mtpa over a now 25-year life of mine,” sain EMH, which owns 49% of Geomet.
Upfront capital cost will rise to US$644mln by using the new mining method, but payback would be just 2.5 years from the start of production, said the statement.
Keith Coughlan, EMH’s executive chairman, added: “The results of the study are very positive for the overall economics, resulting in a far greater amount of the ore resource being utilised for production of lithium and increasing the after-tax NPV8 from USD1.1B to USD1.94B.
“The increased NPV assumes a long-term price for lithium hydroxide of US$17,000 per tonne. An increase in the lithium hydroxide price by 30% to USD 22,100 would increase the NPV8 (post tax) to over USD 3Bn.
“Given the current price of lithium hydroxide is in the vicinity of US$40,000 per tonne it is clear that that the Cinovec Project will be critical to European battery self-sufficiency.
"The use of approximately 54% of the plant tailings for backfill will result in a far smaller environmental impact, with much smaller dry stack tailings storage required, further enhancing the already strong ESG credentials of the Project.
"The significant increase in lithium produced will further add to the supply security of the European battery industry. Importantly, even at this increased production rate, the resource is nowhere near fully utilised - paving the way for future assessment of further production increases.”