Critical Elements delivers positive Rose feasibility study, Quebec
Critical Elements Lithium Corp. [CRE-TSXV; CRECF-OTCQX; F12-FSE] released the results of a new feasibility study on the 100%-owned Rose lithium-tantalum project in Eeyou-Istchee James Bay, Quebec. Unless otherwise stated, all figures are quoted in U.S. dollars and are reported on a 100% equity project basis.
Average production (year 2 to year 16) is 173,317 tonnes of chemical-grade 5.5% spodumene concentrate. Average production (year 2 to year 16) is 441 tonnes of tantalum concentrate. Expected life of mine is 17 years.
Average operating costs are $74.48/tonne milled and $540/tonne of concentrate (all concentrate production combined). Estimated initial capital cost is $357-million before working capital. Average gross margin is 68.3%. After-tax NPV (net present value) is $1,915-million (at 8% discount rate), after-tax IRR (internal rate of return) of 82.4%, and average price assumptions of $4,039/ tonne technical-grade lithium concentrate, $1,852/tonne chemical-grade lithium concentrate, $130/kilogram tantalum pentoxide (Ta2O5). Anticipated construction time to start of production is 21 months.
The corporation’s market strategy is to enter the lithium market with a low-risk approach. The completion of the feasibility on the spodumene plant is the first step to enter the market and establish the corporation as a reliable high-quality lithium supplier. The low-risk approach is characterized by simple open-pit mining and conventional lithium processing technologies.
The mine will excavate a total of 26.3 million tonnes ore grading an average of 0.87% lithium oxide (Li2O) and 138 parts per million Ta2O5 after dilution. The mill will process 1.61 million tonnes of ore per year to produce an annual average of 224,686 tonnes of technical-grade and chemical-grade spodumene concentrates and 441 tonnes of tantalite concentrate. The ore is contained in several parallel and continuous shallow-dipping pegmatite dikes outcropping on surface. The ore zones are open at depth and a future underground operation is possible.
Over the life of mine, the open pit will excavate a total of 182.4 million tonnes of waste rock and 10.9 million tonnes of overburden. The average strip ratio is 7.3 tonnes of waste per tonne of ore.
The Rose property is accessible by road through the Route du Nord, usable all year round from Chibougamau. The mine site can also be reached by Matagami, through Route 109 and Route du Nord. The project is located 80 kilometres south of Goldcorp’s Eleonore gold mine and 45 kilometres northwest of Nemaska’s Whabouchi lithium project and 20 km south of Hydro Quebec’s Eastmain 1 hydroelectricity generating plant. The Nemiscau airport services the region’s air travel needs. The Rose property site is located 50 km by road from the Nemiscau airport.
A mineral reserve estimate for 17 mineralized zones was prepared during this study. The estimation assumed the production of a chemical-grade spodumene concentrate with a price of $2/kilogram Li2O and a tantalite concentrate with a price of $130/kilogram of Ta2O5. The recoveries were fixed at 85% and 64% for lithium and tantalum, respectively. The grade-recovery curve used for resource estimate, which became available after the mineral reserves were evaluated, was verified and found to have little influence on the reserve estimate. The production of a higher-value technical-grade spodumene concentrate was not assumed in the reserve estimate.