QUEBEC – Toronto’s Canada Lithium is arranging a $110-million bought deal financing that is earmarked for partial development of its Quebec lithium mine 60 km north of Val d’Or. A syndicate, lead by Scotia Capital and Macquarie Capital Markets Canada, has agreed to purchase 73.35 million common shares of Canada Lithium at a price of $1.50 per share, for gross proceeds of $110 million. The underwriters have been granted an overallotment of 11.0 million shares for an additional $16.5 million. The offering is scheduled to close at the end of January 2011.
Last month, Canada Lithium announced the results of its 43-101-compliant feasibility study for the development of a mine and lithium carbonate processing facility at the project. Initial construction is planned to commence in mid-2011. Commissioning is expected to begin by the end of 2012, with full production expected in 2013, subject to financing and final permitting. Initial capital costs are estimated to be US$202.0 million. The company says cash flows for the Stage 1 development on a 100% equity basis and the base case economic analysis indicates a pre-tax net present value (NPV), discounted at 8%, of US$270.0 million, at a US$2.67/lb (US$5,875/t) price for lithium carbonate (99.5%).The projected pre-tax internal rate of return (IRR) is 24%. Life-of-mine revenue for Stage 1 is estimated at US$1.78 billion, with earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately US$1.0 billion.
The feasibility report may be read in its entirety at www.CanadaLithium.com.