PERTH (miningweekly.com) – Lithium miner Galaxy Resources has completed an updated feasibility study for its Sal de Vida brine project, in Argentina, and will now move into detailed design and construction.
The updated feasibility study focused on a staged development approach to reduce development capital risk and use surplus cashflow from the Stage 1 operation to fund later stages.
The Stage 1 operation is expected to require a capital investment of $153-million to develop a production capacity of 10 700 t/y of lithium carbonate, with 80% of the production at battery grade quality.
The Stage 1 operation is expected to have a pre-tax net present value (NPV) of $809-million, at an 8% discount rate, and a pre-tax internal rate of return (IRR) of 43%, with a pay-back period of under two years from the start of commercial production.
The study also contemplated a two-staged expansion with the design based on a replication of the Stage 1 project, to deliver a targeted production of some 32 000 t/y of battery grade lithium carbonate once all three stages are in full production.
The project’s mine life has been estimated at 44 years, based on the current brine reserve estimate of 1.3-million tonnes lithium carbonate equivalent.
The Stage 2 expansion will commence immediately after Stage 1 project milestones have been achieved, while Stage 3 development is targeted for 2026, bringing the project to full production by 2028.
The development of all three stages is expected to cost $466-million, with the project to have a pre-tax NPV of $2.1-billion and an IRR of 43%, once in full production.
“Completion of the feasibility study marks a major milestone in the development of Sal de Vida. Technical and financial outcomes are very positive and confirm that Sal de Vida will be a globally competitive, low cost producer of battery grade lithium carbonate,” said Galaxy CEO Simon Hay.
“The company’s staged development approach provides a lower risk pathway to a large-scale operation again with compelling financial outcomes.
“The project team will move into the next phase with detailed engineering to commence on the plant and construction of the ponds commencing immediately. We remain on schedule for first production in late 2022, although Covid-19 continues to present significant challenges to the team and remains a risk to the project schedule.”
The company currently has some $217-million in cash and liquid investments on hand to fully fund the development of the Stage 1 operation at Sal de Vida, following a A$161-million capital raise at the end of last year.