(Kitco News) - American Lithium (TSX-V: LI) yesterday announced the results of its maiden preliminary economic assessment ("PEA") for the Tonopah Lithium Claims ("TLC") project located in the Esmerelda lithium district northwest of Tonopah, Nevada.
The company said its maiden PEA demonstrates that the TLC project has the potential to become a substantial, long-life producer of low-cost lithium carbonate ("LCE") with the potential to produce either battery grade LCE or lithium hydroxide.
According to a company press release, the PEA base case scenario (Li only production ramp-up) envisions an initial 4.4 Million tonnes per annum ("Mtpa") processing throughput expanding to 8.8Mtpa, with the project's after-tax NPV8% of $3.26 billion at $20,000/t LCE and an after-tax IRR of 27.5%, as well as LOM production of 1.46 Mt LCE over 40 years.
The project's after-tax payback is 3.8 years and annual after tax cash flow is $396 million. Initial Capex is estimated at $819 million, while total Capex is estimated at $1,431 million, and sustaining Capex at $792 million.
The company said that the PEA alternative case is identical, but with added production of high purity magnesium sulfate as a by-product over life of operations (LOM average production of 1,681,856 tpa of magnesium sulfate ("MgSO4")).
American Lithium noted that the PEA alternate case scenario delivers an after-tax NPV8% of $5.16 billion at $20,000/t LCE & $150/t MgSO4 and an after-tax IRR of 36.0%.
"Magnesium sulphate is an increasingly important fertilizer add-on product with a large and growing global market. High-purity hydrated products (heptahydrate & epsom salts) are used in the food, personal care and water quality industries," the company said.
American Lithium added that in this PEA, the company showcases a long mine-life utilizing "only the highest-grade sections of the deposit", with the potential for additional production ramp-up and mine life utilizing its mid-grade and lower grade sections.
CEO Simon Clarke commented, "We are extremely pleased to announce a very robust maiden PEA for TLC. A significant portion of the processing work has been done to pre-feasibility levels as we believe this will help us move quickly through the next phases of development. At 99.4% LCE purity, TLC offers the capability to produce either battery grade lithium carbonate or hydroxide with minimal additional refining."
"Not only are the economics very strong for high purity lithium production, but TLC also has the potential to produce high purity magnesium sulfates as by-products for agriculture and other end uses," he added.
American Lithium is currently focused on the continued development of its strategically located TLC lithium claystone project in the richly mineralized Esmeralda lithium district in Nevada, as well as continuing to advance its Falchani lithium and Macusani uranium development-stage projects in southeastern Peru.
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