PERTH (miningweekly.com) – ASX- and TSX-listed lithium miner Allkem has reported record revenue and net profit after tax for the full year ended June.

The company on Tuesday reported yearly group revenue of $1.2-billion for the 12 months under review, up from the $744.6-million reported in the previous corresponding period, while net profits after tax increased from $334.6-million to $524.5-million in the same period.

Earnings before interest, taxes, depreciation, amortisation and exploration expenses (Ebitdaix) increased from $511.9-million to $909.7-million.

“We have achieved outstanding full-year results and demonstrated the quality and profitability of our operations. The 2023 revenue and Ebitdaix hit new records and were underpinned by record production at Olaroz and strong performance at Mt Cattlin, which achieved record run rates towards the end of the year,” said Allkem MD and CEO Martin Perez de Solay.

“Our team has reached significant milestones to capture global growth by increasing our production capacity and product offering. Amidst strong demand for lithium we delivered first production at the Naraha lithium hydroxide plant and achieved first production at Olaroz Stage 2.

“Sal de Vida construction is well underway, and James Bay is advancing with approvals received by the federal government for the Environmental and Social Impact Assessment,” said Perez de Solay.

A 2022 updated feasibility study for the Sal de Vida brine project estimated that the Stage 1 operation is expected to require a capital investment of $271-million to develop a production capacity of 105 000 t/y of lithium carbonate.

The Stage 1 operation is expected to have a pre-tax net present value of $1.23-billion, at a 10% discount rate, and a pre-tax internal rate of return of 50%, with a pay-back period of under two years from the start of commercial production.

The Stage 2 expansion would add an additional 30 000 t/y of production at a capital cost of $524-million, bringing total production to 45 000 t/y. The Stage 2 construction is scheduled to start immediately after Stage 1 construction is completed, with Stage 2 production targeted for 24 months later.

“With two revenue-generating operations being supplemented in the near future by Olaroz Stage 2 and a strong balance sheet, we are fully funded to complete construction at Sal de Vida and the development of James Bay. Our strategy to create a leading global integrated lithium chemicals producer will be accelerated by the proposed merger with Livent,” said Perez de Solay.

Allkem is in the midst of a merger agreement with NYSE-listed Livent to create a $10.6-billion global lithium chemicals producer. The transaction is expected to close at the end of 2023, and would see Allkem shareholders own 56% of the newly created company, with Livent shareholders holding the remaining 44%.

Under the transaction, existing Allkem shareholders will receive one share in the newly ASX-listed company for each of their shares held, except for shareholders in certain ineligible jurisdictions, which will receive cash proceeds from the sale of the new share chess depositary interests (CDIs) in lieu of such shares.

Livent shareholders will receive 2.406 NYSE-listed shares for each Livent share held.

The combined company will have a primary listing on the NYSE and maintain a foreign exempt listing on the ASX.