Canadian Mining Journal

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LITHIUM: Pallinghurst promises $600M to Nemaska



Early in May 2019, construction at the Whabouchi mine and mill site looked like this. (Image: Nemaska Lithium)

QUEBEC – Nemaska Lithium, headquartered in Quebec City, says it has signed a letter of intent with the Pallinghurst Group which plans to invest $600-million in the Whabouchi lithium mine and mill 300 km northwest of Chibougamau and the electrochemical plant at Shawinigan as they enter the next stage of development.

Pallinghurst will take up a $200-million private placement of shares and a $400-million rights offering by way of a stand-by commitment. A share price of $0.25 will apply to both transactions.

In April 2019, Nemaska released new numbers indicating that the costs to completion of its mine and plant were going up another $375 million, pushing it to about $1.1 billion. The deal with Pallinghurst will fully fund the project and give Nemaska some financial flexibility.

Nemaska completed a feasibility study for the mine and plant in 2018 that examined the potential of both an open pit and underground mine with a projected life of 33 years. Over the mine life, the project has the potential to generate $19.2 billion. The after tax net present value is $2.4 billion, and the after tax internal rate of return is 30.5%.

Commercial production may be declared as early as the end of this year. See www.NemaskaLithium.com for additional information.