Canadian Mining Journal


LITHIUM: Nemaska Lithium files for creditor protection

Whabouchi mine and mill Credit: Nemaska Lithium

Whabouchi mine and mill Credit: Nemaska Lithium

QUEBEC – Nemaska Lithium has announced that it will seek creditor protection as the company completes a strategic review for its Whabouchi project.

The company will seek approval for an investor solicitation process to secure additional financing, sell certain assets or enter into a joint venture.

Last month, the company announced that it has shut down operations at the Whabouchi lithium mine with a wind down at the Shawinigan hydrometallurgical plant following. The Shawinigan test plant has been operating since February 2017.

Up until the end of September, Nemaska had invested $392 million at the two sites with an estimated $187 million remaining to be spent at the mine and $690 million remaining to be spent at the plant.

In October, Nemaska announced it was laying off 64 employees due to financing delays as it had not yet reached a definitive agreement with the Pallinghurst Group.

The company entered into a letter of intent with Pallinghurst back in July for a $600-million investment, comprised of a $200-million private placement and a $400-million rights offering.

Based on an updated technical report released in July, capital costs for the mine and plant would total $1.3 billion with operating costs at $5,223 per tonne of lithium hydroxide. The associated after-tax net present value estimate, at an 8% discount rate, stands at $2.3 billion with a 27.4% internal rate of return.

At the Whabouchi mine, Nemaska would operate an open pit for the first 26 years and transition to underground extraction for the last seven years. With a focus on vertical integration, the company has developed a proprietary lithium hydroxide process to convert spodumene concentrate into high purity lithium hydroxide. The Whabouchi property features a spodumene-bearing pegmatite zone within the Lac des Montagnes belt.

Whabouchi open pit proven and probable reserves total 27.9 million tonnes grading 1.33% lithium oxide with additional underground reserves of 8.7 million tonnes at 1.21% lithium oxide.

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