Preliminary Economic Assessment Highlights
- Pre-tax
$1.49 billion USD NPV, at an 8% discount rate; - Pre-tax IRR of 55% which represents a payout duration of 2.1 years;
- Total capital expenditures ("CAPEX") of
$571 million USD inclusive of both direct and indirect capital costs, including$52 million USD in contingency; - All-in operating costs ("OPEX") of
$3,319 USD per tonne LCE,$40 million USD annually, including all direct and indirect costs; - 23-year project-life producing a total of 282,090 tonnes of battery-grade lithium carbonate, an average of 12,175 tonnes LCE per year;
- Weighted average lithium concentrations of 128 mg/L from 7 target zones over the project life (range of 84 mg/L to 259 mg/L);
- PEA encompasses approximately 11,000 net hectares, or 14% of Hub City Lithium's lands in
Southern Saskatchewan
Preliminary Economic Assessment Results
Values | |
Production (LCE) | 12,175 tonnes/year |
Project Life | 23.2 years |
Total Capital Cost | |
Average Annual Operating Costs | |
Average Selling Price (LCE) | |
Pre-Tax Net Present Value (8% discount) | |
After-Tax Net Present Value (8% discount) | |
Cash Operating Costs | |
Pre-Tax Internal Rate of Return | 55 % |
After-Tax Internal Rate of Return | 45 % |
Payback Period (Pre-Tax) | 2.1 years |
Payback Period (After-Tax) | 2.4 years |
Profitability Index (PI8% Before-Tax) | 3.2 |
Profitability Index (PI8% After-Tax) | 2.3 |
Rob Gamley, EMP CEO, commented, "We are very pleased with the results of this Preliminary Economic Assessment. With payback in approximately two years, a 23-year project life and a pre-tax IRR of 55%, our Viewfield project is clearly a world class Lithium asset. The PEA study underpins a significant property value and highlights the benefits of excellent brine concentrations, low operating costs and close proximity to local infrastructure in one of the best mining jurisdictions in the world. The outstanding metrics demonstrated in the PEA represents a highly attractive scenario for EMP shareholders and supports the remarkable potential of this project as we quickly move to a commercial pilot."
The PEA encompasses 11,000 net hectares of land at Viewfield project area, representing 46% of Hub City Lithium's Viewfield land holdings and only 14% of Hub City Lithium's total land holdings in
The development plan employed in the PEA has been broken into three distinct units:
- Wellfield: includes all production wellbores, disposal wellbores and pipeline networks.
- Direct Lithium Extraction ("DLE"): includes infrastructure related to pre-filtration and DLE operations. Koch Technology Solutions ("KTS") was the DLE technical partner selected for the PEA.
- Concentration, Refining and Conversion ("CRC"): includes all infrastructure downstream of DLE required to refine and convert lithium chloride eluent into battery grade LCE. Saltworks Technologies ("Saltworks") was the CRC technical provider selected for the PEA.
Based on production testing and fluid analysis conducted by HCL in 2023 in the Viewfield project area, in addition to publicly available lithium testing throughout the area, it is expected to see lithium grades of 84 mg/L to 259 mg/L in the seven target members of the Duperow within the PEA lands. Over the life of the project, an average weighted concentration of 128 mg/L has been estimated.
Exploitation of the resource will occur in two production stages via multi-leg, horizontal wellbores. All project capital (minus end-of life capex) is allocated at the beginning of the project, with production estimated to commence in Q1 2027.
- Stage 1: Wymark C, D and E (Years 1-7)
- These zones are the shallowest and highest concentration (160 mg/L to 259 mg/L) zones and will be produced first through to depletion
- Average LCE output during Stage 1 is 18,850 tonnes per year with average OPEX of
$2,332 per tonne USD
- Stage 2: Wymark A, B and Saskatoon A, B (Years 8 onward)
- These zones are lower concentration (84 mg/l to 145 mg/L) and will be exploited after depletion of Wymark C, D and E
- Average LCE output during Stage 2 is 10,200 tonnes per year with average OPEX of
$4,166 per tonne USD
Note: A recovery factor of 50% of Total Lithium in Place was estimated for the PEA
A total of 36 multi-leg production wells will be drilled to exploit 7 target members of the Duperow, in addition to 30 vertical disposal wells to dispose of spent brine and process water. A network of underground pipelines will be constructed to transport the large water volumes from the wellheads to a DLE site for extraction and concentration to lithium chloride, and from there the eluent will be transported via pipelines to a CRC site for refining and conversion into battery-grade LCE. A total of five DLE sites and
Capital Costs
The anticipated capital costs are:
Capital Costs | Description | Costs (MM USD) |
Wellfield Infrastructure | Wellbores, associated equipment and pipelines | |
DLE and Surface Equip Infrastructure (Koch) | Pre-filtration and DLE | |
CRC and Surface Equip Infrastructure | Concentration, Refining and | |
Contingency | Applied to direct capital costs | |
Total |
Operating Costs
The anticipated operating costs are:
Description | Total Annual | Cost Per | |
Wellfield | Electrical, field personnel, | ||
DLE and Surface Equip | Pre-filtration, electrical, gas, personnel, etc. | ||
CRC and Surface Equip | Chemicals, electrical, gas, | ||
Total |
Sensitivity Analysis
The economic sensitivities are as follows:
LCE Price (USD/Tonne) | After-Tax NPV 8% | After-Tax IRR |
Base ( | 45 % | |
Base -20% ( | 34 % | |
Base +20% ( | 56 % |
Lithium Pricing and Production
A detailed future pricing study for lithium carbonate was not completed for this PEA. A constant price of
Taxes and Royalties
The PEA outlines the taxes based on both the Canadian Federal Government and the Province of
The majority of the Viewfield project area is on Crown land and is subject to Crown royalties. Within the Province of
The following sets forth the total inferred resource incorporated into the PEA:
- Viewfield Phase 1 Total inferred resource net to Hub City Lithium is 692,288 tonnes LCE
- Concentrations in the 7 target zones of the Duperow range from 84 mg/L to 259 mg/L, with a weighted concentration of 128 mg/L
- Wymark D tested 259 mg/L, the highest recorded concentration to date in
Canada
Viewfield Project Area - Q1 2024 Field Pilot
Subsequent to the press release dated
Quality Assurance and Qualified Persons
The Preliminary Economic Assessment was prepared by
Koch Technology Solutions: Koch Technology Solutions is a technology licensing business, a part of
Saltworks Technologies: Saltworks is a team of engineers, scientists and builders focused on the innovation, construction and delivery of full-scale systems to treat industrial wastewater and refine lithium into a battery-grade product. Mr. Ben Sparrow ("Sparrow"),
Each of Klein, Else, Egbers and Sparrow are independent Qualified Persons in accordance with NI 43-101 and have reviewed and approved the technical contents of this news release.
PEA Cautionary Note
The PEA is preliminary in nature and includes inferred resources that are considered too speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty the estimates presented in the PEA will be realized.
Abbreviations
Li2CO3 | Lithium Carbonate |
H2O | Water |
Na | Sodium |
Ca | Calcium |
Cl | Chlorine |
SO4 | Sulphate |
Fe | Iron |
Al | Aluminum |
Cu | Copper |
Ni | Nickel |
Wt% | Weight Percentage |
Wppm | Weight Parts per Million |
Mg/l | Milligrams per Litre |
EDITDA | Earnings Before Interest, Taxes, and Depreciation |
M3 | Cubic Meter |
Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management's current estimates, beliefs, intentions and expectations. They are not guarantees of future performance.
Neither the Canadian Securities Exchange ("CSE") nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE
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