Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:)’s partner Sayona Mining Ltd has demonstrated the technical and financial viability of its North American Lithium Project (NAL) in Quebec, Canada, through a positive pre‐feasibility study (PFS).
Piedmont holds a 25% project interest in the North American Lithium and Authier projects in Quebec through an equity stake in Sayona Quebec and an equity interest of 17% in Sayona Mining.
Notably, the PFS has estimated a net present value (NPV) of around A$1 billion, low capex of about A$100 million and a 27‐year life of mine, all of which have been welcomed by PLL.
The results confirm the potential for the Abitibi lithium hub, adding to the emerging northern hub and facilitating downstream processing as the company bolsters its position in the North American lithium industry.
North America’s first spodumene producer
Sayona managing director Brett Lynch said the PFS showed the company’s ability to quickly transform the NAL operation to generate a successful turnaround in performance and allow a customised feed source for the planned lithium conversion facility at NAL.
He adds: “Sayona’s acquisition of NAL and turnaround plan was not based simply on restarting the existing operation.
“Rather, it was based on our strategy of creating an Abitibi lithium hub, drawing upon the operation of our nearby Authier project and investing in plant upgrades to deliver improved profitability and performance,”
“We have been modest with our pricing assumptions, but as the sensitivity analysis indicates, there is potential for significant upside in the NPV projection given recent trends in spodumene prices.
“Accordingly, the project partners have already pre-ordered long-lead equipment items in anticipation of a positive study result, ensuring we are ready for start‐up in Q1 2023.”
“With an estimated NPV of around 1 billion Australian dollars, low capex of about A$100 million, our fast speed to production and lengthy 27‐year life of mine, this is a unique opportunity for Sayona, adding to our rapidly growing northern Québec hub as the leading lithium (spodumene) resource base in North America.
“I look forward to driving this project forward as we move towards becoming North America’s first local producer of spodumene next year.
“Notably, there are several options to move downstream, including completing the existing carbonate plant at NAL, which would provide for a low capex and accelerated pathway to market.”
Location of NAL and Authier projects
PFS summary
Key outcomes of the PFS include an estimated pre‐tax NPV of C$952 million (A$1.05 billion as of May 23, 2022) at 8% discount rate, a pre‐tax IRR of 140% and a capital payback period within two years.
The life of mine has been extended to 27 years, based on estimated JORC proven and probable ore reserves of 29.2 million tonnes at 0.96% lithium oxide.
Sayona will implement a ROM (run-of-mine) ore stockpile management system whereby diluted material, lower grade ore and higher‐grade feed will be segregated and managed via a stockpile management plan to ensure consistent feed to the plant.
Lynch adds: “In doubling the expected mine life due to the expanded resource base at NAL, forecast tailings volumes on-site significantly increased.
“Sayona has taken the proactive decision to dry stack tailings, reducing their environmental impact, in a move reflective of the company’s ESG focus.
“This initiative requires detailed engineering to reach a definitive feasibility study (DFS) standard.
“In the meantime, we plan on releasing an updated feasibility study for our Authier project later in Q2, further demonstrating the value of our Abitibi lithium hub.”
Key PFS results.
About NAL partnership
In August last year, Piedmont and Sayona completed the acquisition of North American Lithium Inc (NAL) thereby consolidating lithium businesses in Québec, Canada.
Following the acquisition, both parties have confirmed the potential for a significant resource expansion at the newly acquired North American Lithium (NAL) mine.
Last month, the companies completed a resource update for two lithium projects in Quebec, Canada, doubling the original resource estimates for a total of 119.1 million tonnes at 1.05% lithium oxide.