Neo Lithium Corp. [NLC-TSXV; NTTHF-OTCQX; NE2-FSE] released positive results of a NI 43-101 feasibility study (FS) for the production of lithium carbonate from its 100%-owned Tres Quebradas lithium brine project (3Q project) in Catamarca province, Argentina.
The technical report, currently on qualified person review stage, was prepared by Worley, a leading global provider of professional project and asset services in the energy, chemicals and resources sectors with extensive experience in the design and construction of some of the largest and lowest-cost lithium brine processing facilities in Chile and Argentina. The resource and reserve estimate was completed by brine resource and reserve experts Groundwater Insight Inc.
“In a very short time since its discovery in December, 2015, we have achieved every significant milestone at the 3Q project on time and on budget. We have identified, defined and confirmed one of the most valuable lithium resources in the world with one of the lowest projected operating costs and capital costs in the industry. We now deliver a project ready to be built to Zijin Mining Group Co. Ltd. at a significant premium to the prevailing trading price immediately prior to announcement of the transaction that provides significant value to our shareholders,” stated Waldo Perez, president and CEO.
The FS represents a comprehensive study of the technical and economic viability of the 3Q project, and has advanced to a stage where a preferred processing route has been established and an effective method of lithium extraction has been determined. Capacity for the feasibility study remains at 20,000 tonnes per year, but the design footprint for ponds and plant already considers an expansion to 40,000 tonnes per of LCE per year since the resource and reserve is large enough to justify larger production by shortening the mine life.
Highlights include After-tax NPV (8% discount rate) of $1,129 million; After-tax IRR of 39.5%; Capex of $370.5 million; cash operating costs/tonne of lithium carbonate of US$2.954; average annual production of 20,000 tonnes; mine life of 50 years and a 2.25-year payback.
An increase of approximately 4% in the high-grade Measured and Indicated Resource was recently realized, due to the acquisition of a small additional mining claim on October 21, 2021. The updated lithium resources, with an effective date of October 26, 2021, are
Measured and indicated resources of 1.747 Mt of LCE with an average 923 mg/L Lithium with 800 mg/l cut off and 5.369 Mt of LCE with 637 mg/L Lithium with 400 mg/l cut off. Proven and probable reserves of 1,671,900t of LCE with an average 786 mg/L Lithium for life of mine production of 50 years and 769,613 t of LCE with an average 912 mg/L Lithium for the first 20 years of production.
After pond filling is complete, the strategy to maximize value at the 3Q project is to first extract the high-grade brine with four new and two existing wells located in the middle of the high-grade component of the Measured andI Resource.
The FS identifies the preferred development option as being a conventional evaporation pond operation followed by concentrated brine purification and precipitation of lithium carbonate. The processing method is unique to the 3Q project high-grade, low-impurity brine, allowing the company to minimize water and energy consumption.
In early October, 2021, Liex, Neo Lithium’s wholly owned subsidiary in Argentina, purchased 357 hectares contiguous to the 3Q project. The property was acquired because a small portion of the resource expanded into that ground. The company is adding this title to the 3Q project mining group and has updated the resource estimate to include this small block, increasing the total measured and indicated resource with cut-off of 800 milligrams per litre by 4%.
The company recently entered into an arrangement with Zijin Mining Group that, upon completion, will result in the acquisition of all of the company’s outstanding shares at a premium to the prevailing market price and historical trading price of the company’s common shares.