Utah state incentives have bolstered the base case before-tax net present value (NPV) of ASX-listed Anson Resources' Green River lithium project from $1.37-billion to $1.52-billion - or from $896-million to $1.04-billion on an after-tax basis. 

The incentives have increased the project's NPV by 10.9% on a before-tax basis and by 16.7% on an after-tax basis.

This strengthens the Green River project's investment proposition as Anson advances the project's definitive feasibility study and engages with strategic investors and prospective project finance providers.

The underlying estimated cost of constructing the project remains $569-million.

"The Utah incentives materially enhance Green River’s projected economic returns without requiring an increase in the assumed lithium price. Our strategy is to minimise dilution of existing shareholders while continuing to develop the Green River project.

"The raising of capital through a third-party bond, with the support of the Utah Inland Port Authority (UIPA) tax incentives, is one of the opportunities that has been identified that is expected to reduce dilution," explains Aclara CEO and chairperson Bruce Richardson.

Anson is discussing with UIPA the opportunity to use a portion of one of the tax incentives to support funding through a third-party bond - which can fund eligible infrastructure as part of the capital required for the construction of the project.

UIPA in September approved a business incentive for the Green River project capped at $193-million, based on 50% of the projected increase in property tax revenue that will be generated within the Castle Country project area and may be available for up to 25 years.

UIPA is allowed to use approved tax differentials to support bonds that finance eligible public infrastructure such as power, water, gas utility extensions, rail extensions, road extensions and others.

In turn, the Utah Governor's Office of Economic Opportunity also in September approved a post-performance refundable tax credit of about $212-million for the Green River project.

The incentive was awarded under Utah’s Rural Economic Development Tax Increment Financing programme. It is based on 50% of the $425-million in projected incremental Utah state tax revenue expected to be generated by the project over 20 years.

For the updated financial model on Green River, Anson assumed that the incentives are earned evenly over 20 years at about $10.6-million a year. The actual yearly credits may differ from this assumption, depending on qualifying capital investment, wage commitments, yearly verification of performance, the timing of project construction and production, continued project operations and incremental state taxes generated and paid.

The project also remains exposed to lithium price movements and other development risks.

Anson plans to have Green River produce 10 000 t/y of battery-grade lithium carbonate over a 20-year operating life.