Lithium explorer and project developer Winsome Resources said that its fully-owned Adina lithium project in Canada will require a total project expenditure of C$5.9bn ($4.34bn), based on the findings of a preliminary economic assessment (PEA).
The total costs include C1 Operating cost of C$4.5bn ($3.31bn), a start-up capital cost of C$350m ($258m), a sustaining capital cost of C$732m ($539m), and royalty cost of C$399m ($293.74m).
Synectiq prepared the PEA under the supervision of Winsome Resources projects vice president Kim-Quyên Nguyên.
Winsome Resources said the project will use open-pit mining with conventional diesel excavators.
The Adina lithium project will have an estimated life of mine (LOM) of 21 years. The annual production of the Canadian project is forecasted at 1.7 million tonnes.
According to the study, the Adina lithium project will have a processing throughput of 4,650 tonnes per day (tpd) for a dense media separation (DMS) operation for the duration of the LOM.
Initially identified in 2016, the Adina lithium project has an inferred mineral resource estimate of 78 million tonnes.
Winsome Resources managing director Chris Evans said: “In particular the outcome that the existing and well-maintained Renard facility can be repurposed for a relatively modest capital cost to develop our hard-rock spodumene resource is a major benefit.
“Importantly it offers a significant commercial advantage that will see the facility operate through market fluctuations and commodity cycles.
“The ease of mining mineralised material at Adina via an initial low strip open pit along with the simple DMS flowsheet results in a competitive operating cost estimate which optimisation may improve further.”
The PEA projects a post-tax net present value (NPV) of C$1bn ($740m) for the Canadian lithium project. It also estimates an after-tax internal rate of return (IRR) of 43%, with a post-tax payback period of 1.8 years.
In addition, the study reveals that the Adina lithium project will contribute an after-tax cash flow of C$2.4bn ($1.77bn).
Furthermore, the lithium project is expected to generate a gross revenue of more than C$10bn ($7.36bn) and C$1.6bn ($1.18bn) in carbon, provincial and federal taxes and Québec mining duties.
The Adina lithium project is also anticipated to create more than 500 jobs during construction and 600 direct jobs during operations.
