An anonymous director reports
GROUNDED LITHIUM FILES PRELIMINARY ECONOMIC ASSESSMENT REPORT FOR THE KINDERSLEY LITHIUM PROJECT - PHASE 1
Grounded Lithium Corp. has filed its preliminary economic assessment titled "NI 43-101 Technical Report: Preliminary Economic Assessment Kindersley Lithium Project -- Phase 1," dated Aug. 9, 2023, and effective as of June 30, 2023, further to the company's news release dated July 26, 2023. The PEA addresses only the first phase of 11,000 tonnes per year of battery-grade lithium hydroxide monohydrate ("LHM") production from the Kindersley Lithium Project ("KLP"). The PEA is available on www.sedarplus.com and on the Company's website at www.groundedlithium.com. A new corporate presentation detailing the PEA results is also available on our website.
The PEA independently assessed the economics of the KLP-Phase 1 based on a US$25,000 realized sales price per tonne of LHM, the results of which include:
After-tax net present value ("NPV") of US$1.0 billion using an 8% discount rate and a capital investment of US$335 million, implying an after-tax profitability index ("PI") of nearly 4X. A PI of nearly 4X suggests a highly accretive project with torque to the upside if current spot prices for battery grade lithium material were modeled;
After-tax internal rate of return ("IRR") of 48.5%;
Economic resiliency under a range of key project variables such as price, capital intensity and operating costs. For example, 20% variation in price from US$25,000/tonne LHM to either US$20,000/tonne or US$30,000/tonne of LHM generates after-tax IRRs of 38% and 59%, respectively; and
Payout of only 3.7 years, inclusive of a 1.5 year design and construction phase. This is extremely rapid given a project of this magnitude and scope.
The PEA is based on the implementation of Koch Technologies Solutions' ("KTS") proprietary lithium extraction technology called Li-ProTM. The Company is working with officials from KTS as well as others within the larger Koch Industries group to develop a field pilot plan with associated commercial terms. The Company will communicate efforts in this regard as they become finalized.
The PEA presents data provided by several leading experts in their respective fields, namely Sproule Associates Limited, Grey Owl Engineering, Codeco - Vanoco Engineering Inc., Tundra Engineering Inc. and Fracture Modeling Inc.
The economic analysis of the PEA is based on the following main assumptions:
realized sales price of USD $25,000 per tonne of LHM;
annual production of 11,000 tonnes per year of LHM;
commerciality of KTS' Li-Pro(TM) lithium extraction technology;
minimal pre-filtering expenditures due to the absence of hydrocarbons and H2S;
large diameter wellbores to mitigate pressure loss due to friction and permit installation of large volume electrical submersible pumps; and
estimated operating and capital costs for the project based on the most current industry data available inclusive of recent strong inflationary pressures on facilities and labour.
The PEA is a preliminary cost estimate and includes inferred mineral resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). There is no certainty the results of the KLP outlined by the PEA will be realized.
About Grounded Lithium Corp.
GLC is a publicly traded lithium brine exploration and development company that controls approximately 4.2 million metric tons of lithium carbonate equivalent of inferred resource over our focused land holdings in Southwest Saskatchewan as of the effective date of the PEA. The PEA reports a Phase 1 NPV8 after-tax of US$1.0 billion with an after-tax IRR of 48.5%. GLC's multi-faceted business model involves the consolidation, delineation, exploitation and ultimately development of our opportunity base to fulfill our vision to build a best-in-class, environmentally responsible, Canadian lithium producer supporting the global energy transition shift. U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on https://www.otcmarkets.com/.
Qualified Persons and Technical Report
Scientific and technical information contained in this press release has been prepared under the supervision of Doug Ashton, P.Eng., Suryanarayana Karri, P. Geoph., Alexey Romanov, P. Geo., Meghan Klein, P. Eng., Dean Quirk, P.Eng., Jeffrey Weiss, P.Eng., Chad Hitchings., P.L. Eng., and Michael Munteanu, P.Eng., each of whom is a qualified person within the meaning of NI 43-101.
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