TORONTO (miningweekly.com) – TSX-V- and Aim-listed project developer Bacanora Minerals this week reported positive results of a prefeasibility study (PFS) completed on its flagship Sonora lithium project, in Mexico.
Baconora in August last year became the first company to sign a conditional long-term agreement with electric vehicle maker and energy storage solutions provider Tesla Motors, to supply lithium hydroxide for its Gigafactory, in Nevada, in the US.
Calgary, Alberta-based Bacanora on Wednesday reported that the PFS had calculated an after-tax net present value at an 8% discount of $542-million and an internal rate of return of 25%.
The results highlighted a strong economic case for mining and producing up to 35 000 t/y of battery-grade lithium carbonate (Li2CO3) at Sonora, with the added potential to produce up to 50 000 t/y of potassium sulphate (K2SO4), for sale to the fertiliser industry.
According to the PFS, the Sonora project could be developed using a staged approach, with Phase 1 producing 17 500 t of battery-grade Li2CO3 for the first two years, before implementing a Phase 2 expansion to lift output to 35 000 t/y. Potassium sulphate production would start in the third year.
The initial construction cost was calculated to amount to $240-million, with an additional $177-million required for the Stage 2 expansion.
The operation would be able to produce Li2CO3 at a life-of-mine (LoM) operating cost of $2 698/t, and $2 100/t net of K2SO4 credits.
The potential exists to expand the project further to 50 000 t/y at any time from year three to 20.
The mine design indicated a total of 50-million tonnes of ore to be mined over the planned 20-year mine life, with a stripping ratio of about 3:1 over LoM.
With a compliant indicated mineral resource estimate of five-million tonnes of lithium carbonate equivalent (LCE) and an inferred resource of 3.9-million tonnes of LCE, Bacanora advised that Sonora was one of the world's larger known clay lithium deposits.
Following on from the PFS, management would immediately start a feasibility study, as it sought to bring the project into production to satisfy expected strong growth in demand for lithium from fast-growing sectors, such as electric vehicles and energy storage.
According to Chile-based analyst SignumBox, Li2CO3 prices were forecast in the range of $5 500/t to $6 000/t. Recent data from Asia had indicated that spot pricing was currently above $6 000/t.
The current dominant lithium battery technologies such as lithium cobalt oxide, lithium manganese oxide and lithium nickel manganese cobalt oxide, typically used lithium carbonate as the main source of lithium cathode material and battery cathode demand was the fastest growing segment of the lithium market.
K2SO4 was used as a fertiliser product and could sell in the range of $600/t to $700/t.
Bacanora planned to complete pilot plant trials and distribute lithium samples to potential offtakers during the third quarter, while it finalised its feasibility study for publication early in 2017. Commissioning of the project was expected in the fourth quarter of 2018.