Diversified miner Premier African Minerals’ scoping study for its Zulu lithium project, in Zimbabwe, has found a significant increase in spodumene concentrate prices, which is set to benefit the miner as concentrate selling processes are projected to continue improving.
Premier has already embarked on a definitive feasibility study at Zulu, with drilling well under way and two rigs operating at present.
Preliminary work continues to support the findings set out in the scoping study, with CEO George Roach confirming on August 16 that specific examples include an overall reduction in certain specific costs in Zimbabwe, most notably in respect of labour and the confirmation of the projected logistics costs on a free-on-board Beira basis.
“It is interesting to note the significant increase in Zulu's net present value with improved and projected spodumene concentrate pricing compared with Premier's present market capitalisation,” Roach commented.
The scoping study, initiated in 2017, identified a target production of 84 000 t/y of spodumene concentrate and 32 500 t/y of petalite concentrate for an initial 15-year life-of-mine to be the most appropriate option and was based on prices of $800/t of spodumene and $400/t of petalite concentrate.
The updated scoping study models three scenarios for different spodumene concentrate sales prices to illustrate the impact of the recent significant increase in prices of spodumene and petalite.
In addition, Bara Consulting, which compiled the scoping study, escalated the capital and operating costs by US inflation for a period of four years (at a rate of 2% a year) as costs are reported in dollars.
No further changes have been made to the underlying economic, technical, engineering or processing assumptions used in the scoping study, nor resources nor the mine plan.
Overall, the improvement in spodumene pricing and, therefore, the revenue factors, have a significant positive improvement in the economic results despite the escalated capital and operating costs, Premier said.