Green Technology Metals (ASX: GT1) is considering its multi-stage $1.8 billion Seymour lithium project to start output in 2026 as Ontario’s first mine for the battery metal.
The project including two mines and spodumene concentrators in the province’s northwest has an after-tax net present value of $1.2 billion at an 8% discount rate with an internal rate of return of 54%, according to a preliminary economic assessment (PEA) released on Thursday.
“The PEA validates the company's potential to emerge as a large-scale, cost-effective producer of lithium concentrates and chemicals,” Perth, Australia-based Green Technology Metals said in a release accompanying the study. “There is substantial demand for long-term offtake in North America.”
The project about 250 km northeast of Thunder Bay is vying with others in a race to market even as prices for lithium have collapsed this year. Frontier Lithium (TSX-V: FL) is several months ahead of Seymour advancing a feasibility study on the nearby PAK lithium project. But record battery metals prices have eased as more automakers find supplies and the Chinese economy sputters.
The price of 5.5%-6.2% lithium spodumene was US$1,640 per tonne on Wednesday, down from about US$2,070 per tonne a month ago, according to the Shanghai Metals Market. The PEA used a price of US$2,029 per tonne.
The Seymour project would have a net profit of $2.5 billion when considering total costs of $985 per tonne of 5.5% spodumene concentrate produced, according to the PEA. Average output over the 15-year mine life would be 207,000 tonnes a year. Annual earnings before interest, tax, depreciation and amortization would average $309 million.
April 25, 2024
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