PERTH (miningweekly.com) – The Finniss lithium project, in the Northern Territory, could deliver significant income for developer Core Lithium, studies have shown.
Core on Monday released an updated definitive feasibility study (DFS) for the Finniss project, which incorporated a 30% increase in the ore reserves, which now stood at 7.4-million tonnes, at 13% lithium oxide, underpinning an eight-year life-of-mine (LoM).
The updated Stage 1 DFS comprised an openpit operation from the Grants, and Hang Gong deposits, and an underground operation at the Grants BP33 and Carlton prospects.
The study estimated that the project would require an initial capital investment of A$89-million to support annual lithium production of 175 000 t/y from a one-million-tonne-a-year plant.
The DFS estimated a post-tax net present value (NPV) of A$170-million and an internal rate of return (IRR) of 47%, with a pay-back period of two years. LoM C1 operating costs have been estimated at $364/t of concentrate generating a LoM operating margin of more than $370/t, assuming a LoM average sales price of $743/t.
“The DFS confirms Finniss lithium project as a simple, low risk and low capital intensity project with a high cash generating potential, and puts Core on track to become Australia’s next lithium producer,” said Core MD Stephen Biggins.
“The study highlights the project’s attractive combination of high-grade ore reserves, simple dense media separation processing producing a high quality concentrate, and proximity to nearby existing infrastructure including the Port of Darwin.
“With the updated DFS now completed, we aim to finalise funding over the coming months, to allow Core to make a final investment decision in 2021 and fast-track construction. We are also maintaining our exploration momentum, with the aim to more than double the mine life and resources of the project,” Biggins said.
First spodumene concentrate from Finniss is planned for 2022.
Meanwhile, Core on Monday also released the results of an extension scoping study, has further confirmed the project economics.
The mining extension scoping study also includes the measured, indicated and inferred material that was not included in the DFS.
The mining extension scoping study estimated a mine life of ten years, based on an yearly lithium concentrate production of 175 000 t/y, with the project’s capital investment requirements to remain unchanged from the DFS.
C1 operating costs have been estimated at $372/t, while the post-tax NPV is estimated at A$193-million and the IRR at 49%.
Additionally, a scoping study has also identified the potential for lithium fines production at Finniss as a saleable by-product.
The scoping study found that Core could potentially produce and sell some 110 000 t/y of lithium fines, grading some 1% lithium oxide, with no incremental mining activities required.
The fines operation would require an incremental capital investment of A$8.4-million and would have marginal operating costs for processing, storage, haulage to port and ship loading of some $21/t of fines.
Core said on Monday that the company had received non-binding interests from potential offtake partners for the lithium fines by-product, with indicative pricing of between $75/t and $85/t.
As a by-product, the fines product could potentially reduce the LoM average C1 operating costs by around $23/t of spodumene concentrate, compared with the DFS estimates, while also potentially reducing tailings streams and waste impacts on the environment.