Lithium Power International Limited (ASX: LPI) has estimated an NPV of US$1.4 billion in its updated Definitive Feasibility Study (DFS) for the Stage One Maricunga Lithium Brine project in northern Chile.
• The updated Maricunga Stage One Lithium Brine project’s DFS supports 15,200 tonnes per annum production of lithium carbonate (LCE) for 20 years.
• Project NPV1 (leveraged basis) of US$1.425B (after tax) at 8% discount rate, providing an IRR of 39.6% and a two-year payback. Estimated steady-state annual EBITDA of US$324M.
• Project operating cost places Maricunga among the most efficient producers with an OPEX of US$3,718 per tonne not including credit from potassium chloride (KCl) by-product. KCI production was not considered in the DFS.
• Project direct development cost estimated at US$419M, indirect costs at US$145M and contingency costs at US$62M to provide a total project CAPEX of US$626M.
• Exceptional ESG profile aims to achieve carbon neutrality once operation beds down, setting new standards for social relationships. Certification process led by Deloitte will continue during upcoming years as the project advances.
• Project infrastructure including water rights have been secured by long term contracts during project construction and operation. Access to the National Power Grid has been granted, ensuring future power supply including an important component of renewable energy.
• Revised DFS completed by Tier-1 engineering consultancy Worley to international standards, with cost inputs from EPC contractors to provide greater certainty on cost estimates. The Resource and Reserve estimates were prepared by Atacama Water.
• Preliminary indications of interest received from international and Chilean financial institutions and private funds for debt financing and future equity financing of the project. Finance process will continue in coming months.
CEO, Cristobal Garcia-Huidobro, said updating of the EPC proposals will commence during Q1. Final Investment Decision expected for 2022, with construction to start immediately after.
“We are extremely pleased with the results of the updated DFS for the Maricunga Stage One lithium brine project. The strong economics, as well as the exceptional sustainability profile, confirms the high standard and attractiveness of the project.
“The priority for 2022 is to finalise project finance for the Stage One project. We are actively working with both international and Chilean financial institutions on different structures for debt financing, as well as with potential strategic partners for equity investments. Update of the EPC proposals will soon commence, with the expectation of a Final Investment Decision (FID) by the end of the year. Construction should start immediately after the FID.
“We are continuing to work on the development of a subsequent Stage Two at Maricunga, considering the current significant forecast growth in lithium demand and Stage One being in its final phase of pre- production. This will also benefit from the maturation of new production technologies in the lithium industry, realising the significant value of all our assets.”
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