Mr. Ian Stalker reports
LSC LITHIUM FILES TECHNICAL REPORT FOR POSITIVE PEA FOR THE POZUELOS-PASTOS GRANDES PROJECT
LSC Lithium Corp. has filed its technical report for the preliminary economic assessment (PEA) for its Pozuelos-Pastos Grandes (PPG) project titled "Preliminary Economic Assessment -- Pozuelos-Pastos Grandes Project NI 43-101 Technical Report, Salta, Argentina" on SEDAR and the company's website.
Average operating costs (including 5-per-cent contingency): $2,994 (U.S.)/t lithium carbonate
Initial capital (including $59-million contingency): $338-million (U.S.)
After-tax annual free cash flow: $125-million (U.S.)
Production of battery grade Li2CO3: 20,000 tonnes per annum
NPV 8 per cent (pretax): $1,036-million (U.S.)
Internal rate of return (pretax): 34 per cent
NPV 8 per cent (posttax): $762-million (U.S.)
IRR (posttax): 30 per cent
$762-million (U.S.) after-tax NPV at 8-per-cent discount rate and IRR of 30 per cent;
- Capital expenditure
estimate of $338-million (U.S.), with 34 per cent of estimate at PFS-level accuracy;
Operating expenditure of $2,994 (U.S.)/t of lithium carbonate over life of mine;
Mine life of at least 20 years with initial production in 2021 and steady state in 2024;
Designed for production of 20,000 tpa of battery-grade lithium carbonate;
Combined PPG project resource of 2,617,000 tonnes LCE in measured and indicated category and 938,500 tonnes LCE in the inferred category (1);
Process development supported by bench-scale test work. Pozuelos brine chemistry, in particular is amenable to excellent process performance.
LSC's president and chief executive officer, Ian Stalker, noted: "The filing of this technical report is another important milestone. These results support our view that PPG is one of the most advanced and economically viable lithium projects in Argentina. Operating costs are in the lowest quartile globally, the capital requirements are manageable and we are excited by the large resource, which leaves room for future upsizing."
The PEA is based upon brine grades across LSC's measured, indicated and inferred mineral resources only. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the PPG project envisioned by the PEA will be realized. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.
Unique project advantages
The PPG project enjoys certain unique advantages, which support a rapid development schedule, and low capital and operating costs:
LSC controls over 90 per cent of the area of the Pozuelos salar and its surroundings. This advantageous position makes siting of infrastructure, extraction of fresh water and preparation of brine-extraction models extremely simple. In this way, sustainable pumping of brine can be ensured.
Geotechnical conditions in the mature portion of the Pozuelos salar are such that construction of evaporation ponds can occur on the salar surface at low cost.
For the two reasons above, it was decided to locate all infrastructure at Pozuelos, with only extraction wells and a pipeline located at Pastos Grandes.
Pozuelos's proximity to the existing Fenix gas pipeline ensures that only a 26-kilometre connection needs to be constructed. LSC has been allocated gas capacity on this pipeline by the gas supply company.
At least three separate sources of fresh water have been identified and road access is readily available.
The brine chemistry of the Pozuelos and Pastos Grandes salars complement each other. Test work has shown that an efficient evaporation path can be pursued to produce a high-grade and high-purity concentrate for feeding into the lithium plant ensuring high recovery rates.
The Argentine fiscal regime is very supportive of mining projects. A reduced corporate tax rate of 25 per cent will be effective for the industry from 2020. A royalty of 3 per cent is applied to all exported products. Salta province in particular is actively encouraging mining investment and therefore requires no additional royalties or government participation in the project.
Pozuelos hosts no communities in the immediate vicinity or environmentally sensitive flora or fauna. This increases the likelihood of a fast and efficient project approval and implementation.
LSC has developed a processing method that is based on conventional and proven unit operations for lithium brines.
The information contained in this news release relating to the PEA has been reviewed and is approved by Lawrence D. Henchel, PGeo, of Stantec Consulting International LLC. Mr. Henchel is a qualified person as the term is defined in NI 43-101 and is independent of LSC. GHD of Santiago, Chile, has also reviewed and approved the presentation of the PEA information in this news release.
About LSC Lithium Corp.
LSC Lithium has amassed a large portfolio of prospective lithium-rich salars and is focused on developing its tenements located in five salars: Pozuelos, Pastos Grandes, Rio Grande, Salinas Grandes and Jama. All LSC tenements are located in the "Lithium Triangle," an area at the intersection of Argentina, Bolivia and Chile where the world's most abundant lithium brine deposits are found. LSC Lithium has a land package portfolio totalling approximately 300,000 hectares, which represents extensive lithium prospective salar holdings in Argentina.
(1) See technical report titled "Mineral Resource Estimate and Technical Report on the Salar de Pastos Grandes Project, Salta Province, Argentina" with an effective date of Oct. 28, 2018, filed on the company's SEDAR profile. Also technical report titled "Mineral Resource Estimate and Technical Report on the Salar de Pozuelos Project, Salta Province, Argentina" with an effective date of Nov. 22, 2018
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