Frontier Lithium has released the results of a PFS for the PAK lithium project located approximately 175 km north of Red Lake, Ontario, Canada.
The results of the PFS include a pre-tax NPV at an 8% discount rate of $448 million with a pre-tax IRR of 46.5% and a post-tax NPV at an 8% discount rate of $301 million with a post-tax IRR of 38.3%.
Highlights from the PFS, with the base-case premium technical grade lithium concentrate of 7.2% Li2O (TG_SC7.2) price of $1,250/t, chemical grade lithium concentrate of 6.6% Li2O (CG_SC6.6) price of $750/t and an exchange rate of US$1.25/C$, are as follows (all figures in Canadian dollars unless otherwise stated):
• Life of Mine Revenue is $1,859 million
• Pre-production Capital is $147 million with a contingency of 10% included within the initial capital. Pre-production is for a two-year period.
• Sustaining Capital $37 million for the Life of Mine (LOM)
• Pre-tax NPV (8% discount rate) of $448 million and internal rate of return of 46.5%
• Post-tax NPV (8% discount rate) of $301 million and internal rate of return of 38.3%
• Pre-tax Cash Flow of $1,013 million over 16 year LOM
• Post-tax Cash Flow of $700 million over 16 year LOM
• Positive Cash-flow is realized in year 2 of production
• 5.8 Mt of mill feed averaging a combined 2.00% Li2O
• 11.5 year open pit operation, 4.5 year underground operation
• Mill operates at average tonnage of 1,090 t/d
• Total production of 1.14 Mt of technical grade concentrate of 7.2% Li2O
• Total production of 115,500 t of chemical grade concentrate of 6.6% Li2O.
“The compelling PFS results display the PAK lithium project’s ability to firstly become a high margin, low cost producer of a unique premium low-iron spodumene concentrate which is in very high demand by the global lithium market. In addition, an additional by-product output of chemical grade concentrate is produced which could also be further upgraded as required by the lithium battery market” comments Trevor Walker, President and CEO of Frontier Lithium.
“Despite the strong PFS results, I see room to further optimize the resource and engineering designs and have already transitioned to feasibility level work. This significant milestone also sets the path forward to strategically expand the resource, support ongoing lithium compound testwork, progress our discussions with potential offtake, as well as furthering collaboration agreements with our neighboring First Nation communities.”