Neo Lithium reports Tres Quebradas PFS
PRESS RELEASE
(This is an abridged version of the release. For the full version click here)
TORONTO, March 21, 2019 (GLOBE NEWSWIRE) -- Neo Lithium Corp. ("Neo Lithium" or the "Company") (TSXV: NLC; OTCQX: NTTHF; FSE: NE2) is pleased to announce positive results of a prefeasibility study ("PFS") prepared in accordance with National Instrument 43-101 ("NI 43-101") for its wholly-owned Tres Quebradas lithium brine project ("3QProject") in Catamarca Province, Argentina.
The technical report summarizing the PFS is being prepared by GHD Chile SA ("GHD") and Groundwater Insight Inc., in accordance with NI 43-101 (the "Technical Report"). GHD is a leading independent engineering services firm with extensive experience in projects developments with some of the largest and lowest cost lithium brine processing facilities in Chile and Argentina. Groundwater Insight Inc. is a technical consultancy with lithium brine experience on more than 18 salars in exploration or production stages.The reserve estimation in the Technical Report was done by groundwater numerical model experts IHLLA Research Group under the supervision of Groundwater Insight Inc. ("Groundwater Insight"). Golder SA and G&T Ingenieria SA also collaborated in the study.
Waldo Perez, President and CEO of Neo Lithium, commented, "With the discovery of a high-grade core, we optimised the 3Q Project development plan with respect to our Preliminary Economic Assessment. The new capex and opex, together with a long life of mine and high-grade brine, allow us to present a superior IRR of 50%. Furthermore, we currently continue drilling the high grade core and we are now able to validate that the 3Q Project still has further significant high-grade resource upside potential."
The PFS represents a comprehensive study of the technical and economic viability of the 3Q Project and has advanced to a stage where a preferred processing method has been established and an effective method of mineral processing has been determined.
PFS Highlights
Unless otherwise indicated, all dollar amounts in this press release are stated in U.S. dollars ("$"). Currency exchange is based on current rates.
Description | PEA | PFS | ||||
After-Tax Net Present Value ("NPV") @ 8% Discount Rate | $1,200 million | US$1,144 million | ||||
After-Tax Internal Rate of Return ("IRR") | 27.9% | 49.9% | ||||
Initial Capital Expenditures | $490.2 million | US$318.9 million | ||||
Cash Operating Costs (per tonne of lithium carbonate) | $ 2,791 | $2,914 | ||||
Average Annual Production (lithium carbonate) | 35,000 | 20,000 | ||||
Mine Life | 20 years | 35 years | ||||
Payback Period (from commencement of production) | 2 years | 1 year 8 months |
Note: By-products (such as potash, calcium chloride and boric acid) are not included in the Company's "Preliminary Economic Assessment (PEA) 3Q Project NI 43-101 Technical Report, Catamarca, Argentina" prepared by GHD with an effective date of December 12, 2017 ("PEA") or PFS and could potentially add incremental value to the 3Q Project.
"We are delighted with the results of the PFS. We have improved the PEA results on all fronts, requiring a smaller capital investment for a similar NPV. The 3Q Project is now easier to build, easier to finance, and its larger size allows us to think in terms of potential phased expansions. The final value of this project will be realized over time," said Carlos Vicens CFO of Neo Lithium.
Mineral Resources, Mineral Reserves and Mine Plan
The Mineral Resources were defined in the Company's "Updated Mineral Resource Estimate Technical Report on the 3Q Lithium Project, Catamarca Province, Argentina" prepared by Groundwater Insight Inc. with an effective date of August 14, 2018 and summarized in the following table:
High Grade Lithium Core (Cut-off 800 mg/L) | Deposit at Large (Cut-off 400 mg/L) | ||||||
Measured | Indicated | M&I | Inferred | Measured | Indicated | M&I | Inferred |
Volume [Mm3] | |||||||
45.4 | 93.8 | 139 | 28.3 | 152 | 1,070 | 1,222 | 939 |
Average Lithium concentration (mg/L) | |||||||
1,010 | 1,006 | 1,007 | 1,239 | 701 | 602 | 614 | 584 |
Lithium Carbonate Tonnage (rounded) | |||||||
244,000 | 502,000 | 746,000 | 186,000 | 569,000 | 3,436,000 | 4,005,000 | 2,917,000 |
The strategy to maximize value at the 3Q Project was by first extracting the high-grade core brine with 5 wells strategically located in the middle of the high-grade component of the measured and indicated resource, with screens between 70 and 100 m. Early extraction of high-grade brine allows minimal sizing of early stage ponds. Grade is predicted to decrease with time, as progressively lower grade brine is extracted. Consequently, total pond area increases over the years.
A numerical groundwater model was developed to support the reserve estimate and development of the 35-year mine plan. The model predicts a brine grade decrease over time and simulates additional brine recovery to maintain production at around 20,000 tonnes of lithium carbonate equivalent over the life of mine. The model simulates long term brine recovery, based on rigorous assembly of groundwater flow and solute transport parameters.
The tonnage, grade, and classification of the Mineral Reserves captured within the PFS mine plan are summarized below.
Year | Brine Volume [Mm3] *** | Average Li concentration [mg/l] *** | Li metal [to |
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