TSX Venture Exchange Symbol: AAL
VANCOUVER, Aug. 14, 2018 /CNW/ - Advantage Lithium
Corp. (the "Corporation" or "Advantage Lithium") (TSX Venture: AAL)
(OTCQX: AVLIF) is pleased to announce the results of its
Preliminary Economic Assessment ("PEA") for the production of
Lithium Carbonate from a 20ktpa capacity stand-alone plant located
at its Cauchari Joint-Venture project ("Cauchari JV") in the
province of Jujuy, Argentina. The
PEA was prepared by WorleyParsons Chile S.A. ("Worley Parsons"), a
leading integrated independent engineering services firm with
extensive experience in the design and construction of Lithium
brine projects in Argentina and
Chile.
Key Points:
- US$ 827 Million after-tax
NPV at 8% discount rate and IRR of 24.3 % for 20,000 TPY production
of lithium carbonate. (Pre-Tax NPV - $1,321
Million)
- Pre- Production CAPEX estimate of US$ 401 million for a 20,000 TPY
operation
- OPEX of US $3,667 /tonne of
lithium carbonate average after production ramp-up .
- Processing facilities design based on proven solar
evaporation technology and conventional lithium brine processing,
leveraging JV partner Orocobre's project development
experience
- Mine life of 25 years including a 3-year ramp up for
20,000 TPY production scenario based on conversion factors applied
to 3Mt resource published in May
2018
- Cauchari resource conversion to Measured and Indicated
well underway with DFS to commence in Aug
2018 with completion in early Q2 2019, both fully funded by
the AAL/Orocobre Joint Venture.
- The resource is open to the south and at depth, with
potential to add significant tonnage with additional exploration,
including in the deep sand unit
- Engaged Goldman Sachs & Co. LLC to evaluate strategic
partnerships and financing alternatives to fund its portion of the
development capital
David Sidoo, CEO and Founder
commented "We are very pleased that we have advanced our
Cauchari JV from exploration through to a completed PEA in just
over a year. These encouraging results were based on the
operational experience of our Advantage team, JV partner Orocobre
and industry benchmarks. This clearly demonstrates the potential of
Cauchari JV as a robust project with operating costs expected to be
in the lower quartile of the industry cost curve. Advantage intends
to advance rapidly through our Phase III drilling and well testing
programs to Measured and Indicated resources as an input to our
dynamic production model. The results from this work are required
to support resource to reserve conversion and to achieve our target
Definitive Feasibility Study ("DFS") completion by Q2
2019."
Preliminary Economic Assessment Highlights
Net Present Value
("NPV") @ 8% Discount Rate (before tax)
|
$ 1,321 M
|
Net Present Value
("NPV") @ 8% Discount Rate (after tax)
|
$ 827 M
|
Internal Rate of
Return ("IRR") (after tax)
|
24.3%
|
CAPEX
|
$ 401 M
|
OPEX (per tonne of
Lithium Carbonate)
|
$ 3,667
|
Average Annual
Production (Tonnes Lithium Carbonate)
|
20,000
|
Mine Life
|
25 years
|
Payback (from start
of production)
|
3 y,4 Mo
|
Payback (from start
of construction)
|
5 y,11 Mo
|
Sustaining Capital
(LOM)
|
$ 2.75
M/yr
|
|
All figures are
quoted in U.S. dollars
|
All Economic model
outputs are expressed on a 100 % project ownership
basis
|
Capital Costs
The total Direct Capital costs of the Project for 20Ktpa
production of lithium carbonate are estimated at $282 million. The total initial capital
costs estimate is $401 million which
includes Direct Costs, Indirect Costs and Contingency costs of
$70 million estimated at 25 % of the
Direct Costs.
Direct Capital
Costs
|
(USD
Millions)
|
Brine well
field
|
30
|
Evaporation
Ponds
|
128
|
Liming
Plant
|
8
|
Lithium Carbonate
Plant and General Services
|
86
|
Infrastructure
|
30
|
Indirect Capital
Costs
|
49
|
Contingency (25% of
Direct Costs)
|
70
|
TOTAL
CAPEX
|
401
|
Operating Costs
The Operating Cost estimate is 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 $3,565 per tonne of
lithium carbonate over the life of the mine after start-up.
Indirect Costs include General and Administration and some local
costs and are estimated at $102 per
tonne over the mine life for a Total OPEX estimate of $3,667 per tonne over the mine life, after
start-up.
Accuracy of both CAPEX and OPEX cost estimates prepared by
WorleyParsons are within –20/+35%.
Resource Development
The current mineral resource estimate completed by Flosolutions
Chile is estimated at 3,020,000 tonnes of lithium carbonate
("Li2CO3") equivalent in the Inferred Resource category (see
News Release dated May. 23,
2018).
This extensive lithium mineral resource delineated for the
Cauchari JV resource update along with the PEA results form the
basis for the resource development plan to improve confidence in
the investment base case and advance to a Feasibility Study The
current resource conversion program is planned to be completed in
early 2019 to provide updated information for the Feasibility
Study.
Table 1
Inferred Resources
(lithium cut-off of 300 mg/l)
|
Parameter
|
NW Sector
|
SE Sector
|
Total
|
Resource area
(km2)
|
35.2
|
|
57.4
|
|
92.6
|
|
Aquifer volume
(km3)
|
6.5
|
|
13.9
|
|
20.4
|
|
Mean specific
yield (Sy)
|
9%
|
|
4%
|
|
6%
|
|
Brine volume
(km3)
|
0.6
|
|
0.6
|
|
1.2
|
|
Element
|
Li
|
K
|
Li
|
K
|
Li
|
K
|
Mean concentration
(mg/l)
|
465
|
3,920
|
443
|
4,078
|
450
|
4,028
|
Mean grade
(g/m3)
|
44
|
373
|
20
|
184
|
28
|
244
|
Total Resource
(tonnes)
|
288,000
|
2,420,000
|
280,000
|
2,560,000
|
568,000
|
4,980,000
|
Lithium Carbonate
(tonnes)
|
1,530,000
|
1,490,000
|
3,020,000
|
Potash
(tonnes)
|
4,600,000
|
4,900,000
|
9,500,000
|
Notes: 1. CIM definitions were followed for
mineral resources. 2. The Qualified Person for this
Mineral Resource estimate is Frits Reidel,
CPG. 3. A
lithium cut-off concentration of 300 mg/L has been applied to the
resource estimate. 4. Lithium is converted to lithium
carbonate (Li2CO3) with a conversion factor of
5.32. 5.
Potassium is converted to potash with a conversion factor of
1.91 6.
Numbers may not add due to rounding.
|
Lithium Markets and Price
A marketing and product pricing study was completed by
Signumbox, an independent Marketing consultant engaged by
WorleyParsons.
Production Profile over Life of Mine
Advantage Lithium's marketing and product mix strategy has been
established to maximise value and develop QA/QC protocols for
offtake arrangements for each product as the operation ramps
up.
The Product mix profile Worley
Parsons has used in the cash flow model is projected as
follows:
- Technical Grade only (TG) Years 1- 3,
- Battery Grade Year 4 onwards, ramping up from 20% of production
to 85% of production.
A weighted average price of US $
14,112 per tonne of lithium carbonate was used over the
LOM.
The operation plan for the PEA is based on extraction of the
lithium-rich brine by a conventional wellfield with pump
installations and proven processing techniques.
Processing
Brine is pumped to the surface and directed to a series of
evaporation ponds. Due to the fact that Cauchari brine is a low
Mg/Li type of brine, the magnesium will be removed with slaked lime
as magnesium hydroxide. The brine also contains sufficient sulfate
in order to precipitate the calcium as gypsum liberated from the
lime. During the evaporation process principally halite salts,
glaserite and some sylvite and borate salts are crystalized
generating a concentrated lithium solution suitable to precipitate
lithium carbonate. The concentrated lithium solution is further
polished in order to reduce the calcium, magnesium and other metal
levels in order to produce an industrial technical grade, which is
then re-crystallized in order to make a very pure battery grade
product.
Technical and battery grade lithium carbonate product is planned
to be transported to Antofagasta,
Chile for shipment overseas.
Production is planned to start in 2021 with the plant ramping up
over 3 years to a steady state of 20 ktpa lithium carbonate.
Economic Analysis
Project Design, production and cost parameters were input to the
WorleyParsons Discounted Cash Flow Model for the PEA.
The model generated the following results based on discount factors
6, 8 and 10% with mid-range 8% selected as the base case:
Discount
Rate
|
NPV
(After
Tax)
|
IRR
(After
Tax)
|
NPV
(Pre-Tax)
|
IRR
(Pre
Tax)
|
US$
Million
|
%
|
$US
Million
|
%
|
6%
|
1,121
|
24.3
|
1,763
|
28.8
|
8%
|
827
|
1,321
|
10%
|
610
|
995
|
The PEA data takes into account royalties applicable to the
Cauchari Project
The economic analysis is based on brine grades and lithium
volume estimated from the company's published Inferred Mineral
Resource only. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. There
is no certainty that the Cauchari project evaluation 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
Advantage Project Director Andy
Robb commented "WorleyParsons has confirmed that the
project has the potential to be technically and economically viable
with many project parameters derived from proven technology and
improvements on existing processes either operating or in design
stage.
Advantage is well financed to complete this work and has a
strong core technical team with extensive lithium experience
leading its efforts in Argentina.
To ensure we meet our development milestones and timely
delivery of the DFS, Advantage plans to expand its project team
while building additional capability in project management and
in-house technical support with experienced industry
professionals."
Appointment of Goldman Sachs
Advantage Lithium has engaged Goldman Sachs & Co. LLC to
evaluate strategic partnerships and financing alternatives to fund
its portion of the development capital for the Cauchari JV, in
conjunction with the completion of the Feasibility Study. Given the
highly attractive results of the PEA study and the increasing
global focus on security of lithium supply, Advantage Lithium is
well positioned to pursue potential strategic partnerships and
sources of financing that will maximize shareholder value and
minimize dilution. Advantage Lithium is fully-funded through
completion of its Feasibility Study.
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 Dworsanowski, of
WorleyParsons. Marek Dworsanowski, is a "Qualified Person" as the
term is defined in National Instrument 43-101 and is independent of
Advantage. WorleyParsons has reviewed and approved the
presentation of the PEA information in this news release
To find out more about Advantage Lithium Corp. please contact
Investor Relations at (604) 343-3760 or
email info@advantagelithium.com
ADVANTAGE LITHIUM CORP.
Per:
|
"David
Sidoo"
|
|
|
|
David Sidoo,
President
|
|
Tel:
604.343.3760
|
|
Fax:
604.683.1585
|
|
Email:
info@advantagelithium.com
|
About Advantage Lithium Corp.
Advantage Lithium Corp is focused on developing its 75% owned
Cauchari lithium project, located in Jujuy, Argentina. The
Company also owns 100% interest in three additional lithium
exploration properties in Argentina: Antofalla, Incahuasi, and
Guayatayoc. The Company is headquartered in Vancouver, British Columbia and trades on the
TSX Venture Exchange (TSX-V:AAL) OTCQX Best Market in the U.S.
(OTCQX: AVLIF).
Further information about the Company can be found at
www.advantagelithium.com.
Cautionary Statement:
Certain information contained in this press release constitutes
"forward-looking information", within the meaning of Canadian
legislation. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "is
expected", "intends", or "has the potential to". Forward looking
statements contained in this press release may include statements
regarding the future operating or financial performance of
Advantage that involve known and unknown risks and uncertainties
which may not prove to be accurate. Actual results and outcomes may
differ materially from what is expressed or forecasted in these
forward-looking statements. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations. The forward-looking statements included in this press
release are made as of the date of this press release and the
Company disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable securities legislation.
Neither 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.
SOURCE Advantage Lithium Corp