Australian lithium producer Sayona Mining (ASX: SYA; OTC:SYAXF) has published a positive pre‐feasibility study (PFS) for its flagship North American Lithium (NAL) project in Québec, confirming the NAL operation’s technical and financial viability over a 27-year mine life. Sayona currently has a 75% interest in NAL, with U.S.-based lithium explorer Piedmont Lithium (ASX: PLL) owning the remaining 25%.
Sayona and Piedmont acquired the NAL project in August 2021, after its previous owner sought creditor protection and suspended the operation, which consisted of an open pit spodumene mine and concentrator located in La Corne, Que.
As part of its plans to create a lithium mining hub in the Abitibi region of Québec, Sayona aims to restore operations at NAL and integrate it with its wholly owned Authier project, which had already reached the feasibility stage and will provide supplementary ore feed to NAL.
The restart of the NAL operation would allow Sayona to launch production ahead of other North American projects, generating sustainable cash flows and putting the company on a fast track to go downstream into value‐added lithium hydroxide or carbonate production, it said.
The recent PFS for NAL confirmed potential for this Abitibi lithium hub, adding to the company's emerging northern Quebec hub and facilitating downstream processing, solidifying what would be North America’s largest lithium (spodumene) resource base. As shown in the study, NAL's after-tax net present value (NPV) was estimated at approximately $751 million (8% discount), with an internal rate of return (IRR) of 139% and capital payback of about two years.
Capital costs amounted to $91 million, with upgrades to improve operational efficiency, grade, quality and recovery. Long‐lead equipment has already been ordered to facilitate a restart in the first quarter of 2023.
The project economics were based on proved and probable ore reserves (JORC compliant) of 29.2 million tonnes averaging 0.96% lithium oxide (Li2O). Along with an upgraded ore reserve, the concentrator mill throughput has increased to 4,200 t/d from 3,800 t/d since the acquisition in 2021, producing a 6% Li2O spodumene concentrate.
“Sayona’s acquisition of NAL and turnaround plan was not based simply on restarting the existing operation. Rather, it was based on our strategy of creating an Abitibi lithium hub, drawing upon the operation of our nearby Authier project and investing in plant upgrades to deliver improved profitability and performance," Sayona’s managing director Brett Lynch said.
“We have been modest with our pricing assumptions, but as the sensitivity analysis indicates, there is potential for significant upside in the NPV projection given recent trends in spodumene prices. Accordingly, the project partners have already pre‐ordered long-lead equipment items in anticipation of a positive study result, ensuring we are ready for start‐up in Q1 2023," he added.
Visit www.SayonaMining.com.au for additional information on the NAL project and the PFS.
April 18, 2024
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