European Lithium Ltd (ASX:EUR, OTCQB:EULIF)’s Wolfsberg Lithium Project in Austria, which will deliver the critical mineral to the European market, is delivering some strong metrics that pave the way for the company to round out a definitive feasibility study in the third quarter of the year.
The company aims to be the first local lithium supplier into an integrated European battery supply chain and says that the interim NPV6 calculation confirms strong financials on the wholly-owned project.
Robust outlook for production
The outlook for the project includes the following:
- Accelerated-case NPV6 of $862 million, based on the measured and indicated resource of 9.7 million tonnes at 1% lithium hydroxide;
- Lithium hydroxide production of approximately 10,500 tonnes per annum (tpa) in the accelerated case, based on current and advanced DFS work;
- Assumed lithium hydroxide price of US$26,800 per tonne (current price US$69,000); and
- Mining rate of about 770,000 tonnes per annum over the life of the mine.
The 10,500tpa lithium hydroxide production calculation is the result of detailed mechanical and chemical process flow based on completed complex pilot plant test-work as an essential part of the ongoing DFS studies and advanced engineering work to deploy this process on an industrial scale.
Wolfsberg's annual mining rate of 770,000 tonnes is an outcome of ongoing and advanced mine planning and scheduling work.
Net present value calculations
Consultant group DRA Global, which was engaged to conduct the DFS, has provided the interim production target and NPV6 calculations using the following assumptions:
- Increase of 20% in Capex (being US$508.32 million);
- Increase of 20% of Opex;
- Debt 60% equity 40% for Capex; and
- Interest rate of 6%.
“Calculation of a positive interim NPV provides confidence in the future commercialisation of the Wolfsberg Project that comes during a buoyant market for lithium and increased urgency for decisive action to accelerate the green energy transition, specifically in Europe,” chairman Tony Sage said.
The company says delays caused by COVID-19 travel restrictions and more recently the Ukraine conflict have affected the timeline for completion of the final DFS, which is now anticipated in the third quarter of 2022. The company instead asked for an interim NPV6 calculation.