Lithium junior Nemaska Lithium has been forced to set a new pace for construction activities at its Whabouchi mine and Shawinigan plant, after a project cost-blowout left it short of cash.
The mine construction pace will be adjusted to start production in a “timely fashion”, the Quebec-focused junior said on Monday.
At the Shawinigan commercial plant, detailed engineering will continue, but construction is on hold until additional financing is secured. The company noted that detailed engineering should contribute to reducing construction and commissioning risks for the plant.
The TSX-listed firm recently revealed that it needs another $375-million to complete the mine and electrochemical plant projects.
In an update on its Whabouchi mine development, Nemaska said that Clarksons Platou Securities and National Bank Financial were leading a dual-track financing action plan, including an equity raise and merger and acquisition opportunities to carry the project through the production stage.
This formed part of the review of “strategic alternatives” available to the corporation.
“The past couple of weeks have allowed us to develop an action plan to enable a more efficient and prudent pursuit of our activities. Realistic, yet difficult, decisions had to be made to increase control over our operations until additional financing is completed or other strategic alternatives are achieved,” said president and CEO Guy Bourassa.
Meanwhile, Nemaska announced that VP for operations, Robert Beaulieu would take the helm of construction activities for the Whabouchi mine and the Shawinigan electrochemical plant. He would be supported by Ronald Bougie, who joined Nemaska on Monday as VP for engineering and construction.
The initial capital cost estimate for the Whabouchi mine and Shawinigan plant was C$874.4-million, but eight months into construction, Nemaska announced that it would need an additional C$375-million.
Over the life-of-mine, the mine is expected to produce seven-million tonnes of spodumene concentrate, which will be converted into 770 000 t of battery-grade lithium hydroxide and 361 000 t of battery-grade lithium carbonate.
Last month, Nemaska terminated a supply agreement with Livent, which it was supposed to start supplying in April at a rate of 8 000 t/y, after failing to renegotiate a revised schedule of supply. NYSE-listed Livent has said that it will enforce its rights and resume arbitration.