Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:) welcomes the move by Sayona Quebec Inc, which is 75%-owned by Sayona Mining Ltd (ASX:SYA) and 25% by Piedmont, to restart the North American Lithium (NAL) Project near Val-d’Or, Quebec, Canada.
Sayona Quebec’s board this week authorized the restart and formalized plans for spodumene concentrate production to resume in the first half of 2023.
Operational updates
The NAL project restart will encompass operational updates totalling about $80 million aimed at improving product quality and plant utilization.
Long-lead equipment was ordered and detailed design engineering began in late 2021 based on a timeline jointly planned by the project partners.
The NAL restart project will be entirely funded from pro-rate cash contributions by Sayona and Piedmont with each party having completed capital raises in the first half of this year.
Piedmont Lithium president and chief executive officer Keith Phillips said: “We are excited to take the next step toward supplying much-needed North American lithium resources.
“Authorizing the restart of the NAL project is consistent with our plan to become a revenue-generating company in 2023 and contributes to our strategic goal of becoming a leading North American lithium producer through our integrated portfolio of lithium projects.”
Offtake terms confirmed
The parties have also this week confirmed the terms of a spodumene concentrate offtake agreement.
Under this agreement, Piedmont is entitled to purchase the greater of 113,000 tonnes per year of spodumene concentrate or 50% of production from the NAL project.
The agreement also covers concentrate produced from ore mined at Sayona Quebec’s Authier project.
These purchases are subject to market pricing with a price floor of $500 per tonne and a price ceiling of $900 per tonne.
“A fresh start”
“This is a fresh start for NAL,” Phillips said. “The planned capital upgrades will have a positive impact on both product quality as well as reduced operating costs achieved through improved plant utilization and higher spodumene recoveries.”
If Sayona and Piedmont jointly construct and operate a lithium conversion plant in Quebec, spodumene concentrate produced from the NAL project would be preferentially delivered to the chemical plant upon start of operations.
Any surplus concentrate would first be delivered to Piedmont up to Piedmont’s offtake right and then to third parties.
Studies for Quebec plant
The parties expect to begin a series of technical studies in regard to lithium conversion in Quebec.
“We also look forward to the commencement of technical studies for lithium chemical production in the province of Quebec, which is an ideal location for future lithium hydroxide production given the province’s abundant mineral resources, low-cost electricity and supportive provincial government,” Phillips added.