Lepidico Ltd (ASX:LPD) says the Definitive Feasibility Study (DFS) for its multi-faceted Phase 1 Project has delivered very attractive economics, including a 31% Internal Rate of Return and NPV8% of US$221 million.
The Feasibility Study is based on an integrated mine, concentrator and chemical plant development that collectively has compelling investment fundamentals.
The study investigated a modest scale commercial L-Max plant processing a lithium-mica concentrate feed at a rate of 6.9 tonnes per hour (tph) to produce approximately 4,900tpa of nominal battery grade lithium hydroxide monohydrate and a suite of high vale and bulk by-products, over 14 years. Converting other products to lithium carbonate equivalent gives implied total production of over 7,000tpa LCE.
Managing Director, Joe Walsh, said the relatively modest size of Phase 1 for a lithium chemical project is important as project development and operating risks tend to increase exponentially with scale.
He said the study represents a major milestone in the advancement of the Project and enshrines six years of extensive development work across multiple disciplines.
“Lepidico’s Phase 1 Project represents a unique development opportunity for the production of four valuable alkali metal streams, lithium, caesium, rubidium and potassium.
“This is enabled by the company’s proprietary process technology, L-Max, coupled with lepidolite as the mineral feed source. LOH-Max further differentiates Phase 1 from other lithium projects by providing a single process step solution for the production of lithium hydroxide without the costly and potentially problematic production of sodium sulphate.
“The vertically integrated Phase 1 Project has been demonstrated by the Feasibility Study to be robust technically, economically and from a sustainability perspective, with the focus now on banking the study to transition the business into development and on into production.”
Ore Reserves at Karibib, Namibia total 6.7 million tonnes grading 0.46% Li2O, 2.26% rubidium and 320ppm caesium, a 60% conversion from Mineral Resources of 11.24 million tonnes, which highlights the potential for further Ore Reserve expansion.
Karibib is fully permitted for the re-development of two open pit mines feeding lithium mica ore to a central mineral concentrator that employs conventional flotation technology.
This brownfield development has a modest footprint that maximises the use of ground used by the historical operations. An Environment and Social Impact Assessment (ESIA) is being undertaken to IFC Standards and is on schedule for completion in July 2020.
Concentrate is shipped to a chemical conversion plant to be built in the Khalifa Industrial Zone Abu Dhabi (KIZAD) that employs Lepidico’s proprietary process technologies. Main products of lithium hydroxide monohydrate (LiOH), caesium formate and rubidium sulphate are augmented by bulk by-products of SOP fertiliser and amorphous silica, with the latter used as a partial supplement for cement which attracts a significant carbon credit.
Abu Dhabi is the world’s largest producer of sulphur, used in the manufacture of sulphuric acid, which is a key reagent in the proprietary L-Max process. It is planned that acid will be purchased for the first three years of operation prior to a dedicated acid plant being built, which will also generate power from waste heat.
L-Max is a hydrometallurgical process that is much less power intensive than convention chemical conversion of spodumene, allowing the Phase 1 Project to have a modest carbon intensity versus the industry. An ESIA is planned to commence in July 2020, also undertaken to IFC Standards, which will run in parallel with project permitting.
Development capital of US$139 million includes a 13.6% contingency and is split 30/70 between the mine and concentrator in Namibia, and the chemical conversion plant in Abu Dhabi.
