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PRAIRIE LITHIUM PFS CONFIRMS EXTREMELY LOW OPERATING COSTS OF $2,819 USD PER TONNE

Jane Morgan Management 4 mins read

HIGHLIGHTS:

 

  • Preliminary Feasibility Study (PFS) based on Phase One production of 6,000 tonnes per annum (tpa) of Lithium Carbonate Equivalent (LCE) confirms exceptional economics for the Prairie Lithium Project in the Williston Basin of Saskatchewan, Canada. 

  • Average annual operating costs of US$2,819/t over the operating life of the project make the Prairie Project one of the lowest cost global projects.

  • Base case pre-tax Net Present Value (NPV) of US$448 million and IRR of 23.9% indicate exceptional economics for the project assuming a discount rate of 8% and a conservative long-term price of US$21,000/t based on comprehensive analysis provided by Global Lithium LLC (Mr. Joe Lowry).

  • Recent resource upgrades1 means the modelled 20-year commercial operating life is less than 3% of the Indicated Resource of 4.5 million tonnes of LCE.

  • Capital expenditures of US$290 million (plus contingency) to construct and commission the first phase of the project will lead to production of 6,000tpa of LCE.

  • Total Installed Cost (TIC) for each additional well-pad is estimated at US$70 million and each additional well-pad is expected to add production of 2,000tpa of LCE on similar economics.

  • Direct Lithium Extraction (DLE) test work completed during the Pilot Plant phase has added value to the economics of the Prairie PFS.

  • The robust PFS economics for a 6,000tpa module are able to be replicated and AZL plans to bring initial production online in H1 2025 and then additional modules to build production up to 20,000-25,000tpa in Phase Two and multiples of that in Phase Three.

 

SYDNEY, 29 December 2023 - Arizona Lithium Limited (ASX: AZL, AZLO, AZLOA, OTC: AZLAF) (“Arizona Lithium” or “AZL”), a leading ASX-listed lithium company dedicated to the sustainable development of lithium projects in North America, is excited to announce the outstanding results of the Preliminary Feasibility Study (PFS) for its wholly-owned Prairie Lithium Project, located in the Williston Basin of Saskatchewan, Canada. ?

 

The Prairie Lithium PFS, undertaken with the expertise of global engineering group Samuel Engineering, has confirmed remarkable economics for the project, reinforcing Arizona Lithium's position as a promising contender in the lithium market. The PFS showcases the potential of the Prairie Project, underpinned by the following highlights:

 

  • Phase One production of 6,000 tonnes per annum (tpa) of Lithium Carbonate Equivalent (LCE) with average annual operating costs of only US$2,819 per tonne, positioning the Prairie Project as one of the lowest cost lithium projects globally. 

  • Base case pre-tax Net Present Value (NPV) of US$448 million and an impressive Internal Rate of Return (IRR) of 23.9% assuming a discount rate of 8% and a conservative long-term price of US$21,000/t as evaluated by Global Lithium LLC (Mr. Joe Lowry).

  • Recent resource upgrades allow for a commercial operating life of less than 3% of the Indicated Resource of 4.5 million tonnes of LCE.

  • Capital expenditures of US$290 million (plus contingency) for the construction and commissioning of the first phase of the project, leading to the production of 6,000tpa of LCE.

  • Each additional well-pad, with a Total Installed Cost (TIC) estimated at US$70 million, is projected to contribute an additional 2,000tpa of LCE with similar economics.

  • Successful Direct Lithium Extraction (DLE) test work completed during the Pilot Plant phase has enhanced the project's overall economic viability.

 

With a robust PFS demonstrating the potential for a 6,000tpa module, Arizona Lithium plans to initiate initial production in the first half of 2025, followed by the addition of multiple modules to ramp up production to 20,000-25,000tpa in Phase Two and beyond.

 

Paul Lloyd, Managing Director of Arizona Lithium, expressed his enthusiasm about the Prairie Lithium Project's achievements, stating, "We are delighted to be able to present the market with the PFS for our 100% owned Prairie Lithium project. We have a world-class Lithium resource that will produce a quality product at an extremely low operating cost of USD $2,819 per tonne. The PFS applies a realistic discount rate of 8% and a conservative lithium price of USD 21,000 per tonne. This PFS will stand up to any evaluation by shareholders and industry participants, and I am very proud of the team’s confidence and professional integrity to put these realistic and robust numbers out into the public domain. Our initial production target is 6,000tpa for our first module, which is just the beginning. We believe we will be able to replicate this, with even lower costs. After we have delivered the first module, the Company aims to sanction further modules at the same or better economics to the first module. We are now ready to begin drilling the production and disposal wells and ordering equipment for production starting in 2025."

 

Summary of Key PFS Parameters and Outcomes: 

  • Production Rate: 6,000 tonnes per annum

  • Production Commencement: 20 years

  • Indicated Mineral Resource - Lithium Carbonate Contained: 4,500,000 tonnes

  • Recovery - Direct Lithium Extraction: 90%

Key Financial Parameters:

  • Capital Cost (excluding contingency): $290 million

  • C1 Operating Costs: US$2,819/t LCE

  • Price - Lithium Carbonate: $21,000 US/tonne

  • Payback Period: $2.2 million

  • IRR - pre-tax: 23.9%

  • IRR - after-tax: 20.4%

  • NPV8 pre-tax: $448 million

  • NPV8 after-tax: $312 million

Arizona Lithium Chief Technology Officer, Brett Rabe, commented: “I am extremely proud of the whole team who helped bring this PFS to fruition. From a technology standpoint, we are very comfortable with bringing this project into production. From an economics standpoint, the PFS proves the exceptional potential of the greater Prairie Project. Our team has worked hard on the Pilot Plant and showed the possibility of limiting impurities while maximising Lithium concentration. Now we will look to replicate and improve on these results for our commercial modules”.

 


About us:

About the Prairie Lithium Project

AZL’s Prairie Lithium Project is located in the Williston Basin of Saskatchewan, Canada, and holds a resource of 6.3 MT of LCE, comprised of 4.5 MT LCE Indicated and 1.8 MT LCE Inferred2 . Located in one of the world’s top mining friendly jurisdictions, the projects have easy access to key infrastructure including electricity, natural gas, fresh water, paved highways and railroads. The projects also aim to have strong environmental credentials, with Arizona Lithium targeting to use less us


Contact details:

Jane Morgan 
jm@janemorganmanagement.com.au

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