American Lithium Corp. (TSXV:LI | NASDAQ: AMLI | Frankfurt: 5LA1) has released an updated Preliminary Economic Assessment (PEA) for its Falchani Lithium project located in Puno, southwestern Peru. The independent, updated PEA was completed by DRA Global following the updated mineral resource estimate recently completed by Stantec Consulting Services Ltd.
The updated PEA demonstrates that with low initial capex, the Falchani project has the potential to become a substantial, low-cost, long-life producer of high purity lithium carbonate with the potential to also produce sulphate of potash and cesium sulphate by-products alongside LCE. The PEA base case projects 32 years of mining followed by 11 years of stockpile processing over the potential life of mine. The PEA alternative case is identical, but with added production of high purity SOP and Cesium sulphate as by-products from Years 6-43 alongside the initial expansion. All dollar figures are in US currency.
Simon Clarke, CEO of American Lithium states, “The very large increase in NPV combined with a low initial capex and robust economics in the updated PEA for Falchani are the culmination of successful work programmes at site and flow sheet optimization over the last couple of years combined with an improved lithium pricing environment. We are also extremely pleased to now include the compelling strategic and economic value proposition of adding SOP fertilizer and cesium sulphate by-products to the robust economic potential of core, high purity lithium production at Falchani. This PEA update is a major step towards completion of pre-feasibility work.”
Falchani PEA Highlights (Base Case – LCE only production):
- Pre-tax net present value 8% US$8.41B at US$22,500/t LCE
- After-tax NPV8% US$5.11B at US$22,500/t LCE
- NPV has tripled versus 2019 PEA After-tax NPV8% US$1.5B at $12,000/t LCE
- Pre-tax Internal Rate of Return of 40.7%
- After-tax IRR of 32.0%
- Pre-tax initial capital payback period five years; after-tax payback 3.0 years
- Average LOM annual pre-tax cash flow: US$1,019M; annual after-tax cash flow: US$644M
- Initial Capital Costs estimated at US$681M
- Total Capex LOM estimated at US$2,565M; Sustaining capital estimated at US$236M
- Operating cost estimated at US$5,092/t LCE
- PEA mine and processing plan produces 2.64 Mt LCE LOM over 43 years
- Steady-state Ave. of 23,145tpa LCE Phase 1; 45,084tpa Phase 2; and 72,624tpa Phase 3
“In this PEA, we showcase the existing potential for high annual production and long mine-life at Falchani, yet the deposit resource currently remains open to the north and west with the potential for further resource / mine-life expansion. The low operating cost potential at Falchani with costs of less than US$5,100/t LC, puts it among the lowest cost next-tier lithium projects under development globally. With the potential to also supply significant amounts of SOP to the Peruvian agricultural sector, the project has the unique characteristic of having major positive strategic implications for two key sectors of the Peruvian economy.” Added Simon.
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