Millennial Lithium Corp. Announces Positive Preliminary Economic Assessment Results with Strong Upside Potential for Its Pastos Grandes Project, Argentina
US$ 824 million after-tax NPV at 8% discount rate and IRR of 23.4% for 25,000 TPY production of lithium carbonate.
CAPEX estimate of Total Costs of US$410 million for 25,000 TPY production;
OPEX of US $3,218/tonne of lithium carbonate over the life of the mine.
Operation based on proven solar evaporation technology and conventional lithium brine processing
Mine life of 25 years with 3 year ramp up for 25,000 TPY production scenario.
The Company intends to invest in advanced process test work, production scale wells and a 3 tonne-per month pilot plant/training operation that would help advance further development
Vancouver, British Columbia--(Newsfile Corp. - January 31, 2018) - Millennial Lithium Corp. (TSXV: ML) (FSE: A3N2) (OTCQB: MLNLF) ("Millennial" or the "Company") is pleased to announce the results of its Preliminary Economic Assessment ("PEA") for the production of lithium carbonate from its Pastos Grandes Project in the province of Salta, Argentina.
The PEA was prepared by WorleyParsons Chile S.A. ("WP"), a leading integrated independent engineering services firm with extensive experience in the design and construction of lithium brine projects in Argentina and Chile. All figures are quoted in U.S. dollars.
Farhad Abasov, CEO and President commented, "We are very pleased that we have been able to advance our Pastos Grandes Project from exploration through to a completed PEA in just a year. The results of the PEA indicate that, even using the most conservative assumptions, Pastos Grandes has the potential to be a robust lithium carbonate project among the lower quartile of LCE costs. We intend to continue advancing the project through the next phases of development, and continue driving further value improvements."
Preliminary Economic Assessment Highlights
Net Present Value ("NPV")@8% Discount Rate (after tax) | $824M |
Internal Rate of Return ("IRR") (after tax) | 23.4% |
CAPEX | $410M |
OPEX (per tonne of Lithium Carbonate) | $3,218 |
Average Annual Production (Tonnes Lithium Carbonate) | 25,000 |
Mine Life | 25 years |
Payback (from start of production) | 4.5 years |
Sustaining Capital (LOM) | $76.2M |
The economic analysis is based upon brine grades across the company's Measured, Indicated and Inferred Mineral Resources only. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the Pastos Grandes Project envisioned by the PEA will be realized. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.
Capital Costs
The total Direct Capital costs of the Project for 25K TPY production of lithium carbonate are estimated at $301.2 million. The total initial capital costs estimates are $410.2 million which includes Direct Costs, Indirect Costs and Contingency costs of $60.2 million estimated at 20 % of the Direct Costs.
Direct Capital Costs | (USD Millions) |
Brine well field | 39.6 |
Evaporation Ponds | 129.0 |
Plants and equipment | 66.3 |
Infrastructure | 14.2 |
General Services | 52.1 |
Indirect Capital Costs | |
EPCM, , freight, insurance, duties, spare parts, etc. | 48.8 |
Contingency (20% of Direct Costs) | 60.2 |
TOTAL | $410.2 |
Operating Costs
Operating Costs estimates are also divided into Direct Costs and Indirect Costs (see below). The Direct Costs associated with the brine extraction and processing operations of the Project are estimated at $3,137 per tonne of lithium carbonate over the life of the mine. Indirect Costs include G&A and some local costs and are estimated at $81 per tonne over the mine life for a Total OPEX estimate of $3,218 per tonne over the mine life.
Direct Costs | USD/T Li2CO3 |
Chemical Reagents | 1,502 |
Salt Removal and Transport | 512 |
Energy | 315 |
Manpower | 161 |
Camp/Catering | 188 |
Maintenance | 307 |
Transport | 152 |
Indirect Costs-G&A, local | 81 |
TOTAL | 3,218 |
Accuracy of both CAPEX and OPEX cost estimates prepared by WP are expected to be within -20/+35%.
Development Plan
The strong lithium mineral resource delineated at the Pastos Grandes Project and the PEA results form the basis for mine development. The resource estimate, completed by Montgomery and Associates Chile, includes 2,131,000 tonnes of lithium carbonate ("Li2CO3") equivalent in the Measured and Indicated Resource categories, with an additional 878,000 tonnes of Li2CO3 in the Inferred Resource category (see News Release dated Nov. 27, 2017).
Table 1
Resource | Brine Volume | Avg. Li | In situ Li | Li2CO3 |
Measured | 5.2 x 108 | 465 | 240,000 | 1,277,000 |
Indicated | 3.8 x 108 | 418 | 160,000 | 854,000 |
M+I | 9.0 x 108 | 445 | 400,000 | 2,131,000 |
Inferred | 3.5 x 108 | 469 | 165,000 | 878,000 |
*Cut-off grade for brine used to calculate the resource was 300 milligrams per liter
**Tonnages are rounded to the nearest thousand
The reader is cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability.
The operation plan for the PEA is based on extraction of the lithium-rich brine by a conventional well field and pumping operations and proven processing techniques. Brine is pumped to the surface and directed to a series of evaporation ponds to remove the bulk of the impurities by treatment to remove the majority of the contained magnesium, and by crystallizing and removing sodium and potassium salts while simultaneously concentrating the remaining lithium in the enriched brine. When lithium concentrations reach 1-2% the brine would be directed to the lithium carbonate plant where remaining trace impurities including mainly magnesium, boron and calcium are further removed, lithium is precipitated as lithium carbonate from the purified brine and high grade lithium carbonate is produced. The processing facility for any production of the lithium carbonate would be done at the Project. Technical and battery-quality lithium carbonate would then be transported to Antofagasta, Chile for shipment overseas.
Lithium Markets and Price
Millennial in late 2017 engaged SignumBox, a Chile based market research company to produce a Market Research report to outline lithium price forecasts to 2037. The report features pricing forecasts for battery grade and technical grade lithium carbonate as the Millennial operation would be expected to produce both products. At full production item PEA assumes that the Company would produce 20,000 TPY of battery grade lithium carbonate and 5,000 TPY of technical grade lithium carbonate. The average price for lithium carbonate used in the PEA is a combination of the two pricing forecasts depending on the relative amounts of each product produced, in a scenario previous to completion of the recently announced agreement between the Chile's largest lithium producer and the Chilean Government, but which partly anticipated its estimated impact on capacity, availability and prices. In that scenario, overall the average price over the 25 year mine life of the project is $ 13,499 /tonne of lithium carbonate.
Economic Analysis
The data compiled by WorleyParsons forms the basis for the Discounted Cash Flow Model ("DCFM") for the PEA. The DCFM yielded the following results:
Discount Rate | NPV (After Tax) | IRR (After Tax) | NPV Pre-Tax | IRR (Pre Tax) |
6% | 1,112 | 23.4% | 1,741 | 27.7% |
8% | 824 | 23.4% | 1,310 | 27.7% |
10% | 607 | 23.4% | 988 | 27.7% |
The PEA completed by WP on the Millennial Pastos Grandes Project demonstrates attractive economics for the potential production of lithium carbonate. To maintain its goal of an earlier start-up and maximization of value, the Company expects to continue with its aggressive brine well development and production hydrodynamic numerical modeling program, in addition to expediting pilot pond testwork and construction of a minimum 3 tpm pilot plant in 2018. Millennial is well financed to complete this work and has a strong technical team with extensive lithium experience leading its efforts in Argentina. The PEA data takes into account royalties applicable to the Pastos Grandes Project.
An NI 43-101 report is required to be filed, in conjunction with the disclosure of the PEA in this news release, within 45 days.
The information contained in this news release relating to the PEA has been compiled by the WorleyParsons, Santiago, Chile team. The information has been reviewed and approved by Marek Dworzanowski, P. Eng., B.Sc. (Hons), FSAIMM of WorleyParsons. Mr. Dworzanowski is a "Qualified Person" as the term is defined in National Instrument 43-101 and is independent of Millennial. WorleyParsons has reviewed and approved the presentation of the PEA information in this news release
To find out more about Millennial Lithium Corp. please contact Investor Relations at (604) 662-8184 or email info@millenniallithium.com.
MILLENNIAL LITHIUM CORP.
"Farhad Abasov"
President, CEO and Director
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release may contain certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words "anticipate", "believe", "estimate", "intend", "expect", "target, "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to future prices of lithium, commodities, accuracy of mineral or resource exploration activity, reserves or resources, regulatory or government requirements or approvals including approvals of title and mining rights or licenses, the reliability of third party information, continued access to mineral properties or infrastructure, currency risks including the exchange rate of USD$ for Cdn$, fluctuations in the market for lithium, changes in exploration costs and government royalties or taxes in Argentina and other factors or information. Such statements represent the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affections such statements and information other than as required by applicable laws, rules and regulations.
