PERTH (miningweekly.com) – A preliminary economic assessment of the Colina lithium project, in Minas Gerais, Brazil, has estimated an after-tax net present value of A$3.6-billion for the combined Phase 1 and 2 operations, and an internal rate of return of 132%.
ASX-listed Latin Resources on Friday revealed that the Phase 1 operation would require a capital investment of $253-million, with first production targeted for 2026, while Phase 2 would require a further $55-million of capital investment, and would increase life-of-mine production to 525 000 t/y of SC5.5 and 159 000 t/y of SC3.
The Phase 2 ramp-up is expected to be constructed in 2026 and 2027, with Phase 2 production to start in 2028, and achieve nameplate capacity in 2029.
The Phase 1 capital is expected to be funded by a combination of debt and equity, while Phase 2 will be funded from cashflows generated by the Phase 1 operation.
Over the 11-year operating life, the Colina project is expected to generate revenues of A$12.6-billion and free cash flows of A$6.8-billion, at an all-in sustaining cost of $536/t.
A Phase 3 mine-life extension and expansion will be evaluated as part of a definitive feasibility study (DFS).
“Latin Resources is extremely proud to have produced such compelling economic results with our first feasibility study on the Colina project. The low-cost capex and fast-track to production in 2026 will hit the sweet spot of rising lithium prices many are predicting over the coming years,” said Latin Resources MD Chris Gale.
“The Colina project is on track to become one the world’s largest spodumene mines with very low operational costs. The company is very committed to developing a lithium mine with true sustainable mining practices, which will include hydro power, dry-stack tailings and recycled water systems.
“The phased capital development strategy provides a viable ramp-up that self-funds its expansion to become a tier one lithium mine. Minas Gerais is an excellent jurisdiction to support delivery of the Colina project into a sustainable, large and low-cost spodumene operation on an accelerated basis.
“Latin Resource alongside Sigma Lithium will propel Lithium Valley, Brazil into one of the global top four lithium provinces,” said Gale.
An updated mineral resource estimate for Colina is due in the fourth quarter of this year, which is expected to increase tonnage and convert existing resource to a higher Joint Ore Reserves Committee classification. The results of the preliminary economic estimate and the mineral resource update will serve as the foundation of the DFS, which is targeted for completion in mid-2024.