PERTH (miningweekly.com) – Lithium developer Liontown Resources has awarded a A$35-million engineering, procurement and construction management (EPCM) contract to engineering firm Lycopodium Minerals at its Kathleen Valley lithium project, in Western Australia.
Lycopodium will deliver the EPCM services for the processing facility at Kathleen Valley and the associated non-process infrastructure.
A definitive feasibility study (DFS) on Kathleen Valley estimated that the project would require an initial capital investment of A$473-million to support a 2.5-million-tonne-a-year operation, producing 500 000 t/y of spodumene concentrate.
During year six of the operation, a further A$66-million investment will be made to increase the project capacity to 4-million tonnes a year, delivering 700 000 t/y of spodumene concentrate.
Based on this production scenario, the Kathleen Valley operation is expected to have a mine life of 23 years, and will generate life-of-mine free cash flows of A$12.2-billion. The DFS estimated a post-tax net present value of A$4.2-billion and an internal rate of return of 57%, with a payback period of 2.3 years.
Liontown said on Thursday that the award of the EPCM contract followed a final investment decision on Kathleen Valley in June this year, with the project remaining on track for commissioning and production by the second quarter of 2024.