PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Manono lithium/tin project, in the Democratic Republic of Congo, has estimated that it would produce around 700 000 t/y high grade lithium and 45 475 t/y of primary lithium sulphate over a 20-year mine life.
ASX-listed AVZ Minerals told shareholders that the project would require a capital investment of $545.5-million, which included a $49.59-million contingency.
The pre-production capital cost would include transport upgrades and the rehabilitation of the Mpiana Mwanga hydroelectric power plant, which would account for $41.85-million and $46.54-million worth of investment, respectively.
The DFS estimated that the project would have a post-tax net present value of over $1.0-billion and an internal rate of return of 33%, with life-of-mine net profits after tax estimated at $3.77-billion. Average annual earnings before interest, taxes, depreciation and amortization have been estimated at $380-million over the life of the project.
“The DFS proves the Manono lithium/tin project to be a very robust project with strong financial metrics, demonstrated by the key metrics of the DFS base case scenario on a 100% ownership basis,” said AVZ MD Nigel Ferguson.
“The Manono project has a substantial orebody capable of extending the life-of-mine well past the current 20 years, as modelled. It also has a robust workable transport solution for securing delivery of products to the export ports and a clear plan to work with the community for social development and environmental compliance.
“We have intentionally been conservative in our interpretation of financial impacts on the project and, therefore, believe these numbers can be improved in the future, despite having included significant non-project infrastructure items such as rehabilitation of roads, the Mpiana Mwanga hydroelectric power plant, and taken an adverse opinion on any potential VAT refund, amounting to some $658-million over the life-of-mine, which has been totally excluded from the cash flow.”
Ferguson said that the project’s economics were further enhanced by the addition of the high value-added primary lithium sulphate product.
“Further upside potential for the Manono project comes in the nature of significant upside resource potential from Carrie de L’Este, added cash flow from tin and tantalum credits, additional negotiations on a reduction in pricing for transport, the roll out of electric powered mining equipment and the establishment of the special economic zone at Manono, which will potentially provide discounted rates on taxes, duties, VAT and further significant benefits for the project.”