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Lithium Chile (TSXV: LITH) has released the results of a preliminary economic assessment (PEA) for its Salar de Arizaro lithium project in Salta province, Argentina. The PEA report was completed by Ausenco in accordance with NI 43-101 standards.
The study demonstrated the potential of a 25,000-tonne-per-annum commercial-scale operation to produce battery-grade lithium carbonate over 19 years. It was based on a recently updated resource totalling 3.32 million tonnes of lithium carbonate equivalent (LCE) in the indicated and inferred categories.
The after-tax net present value for the Arizaro project is pegged at $1.1 billion (at an 8% discount rate), with an internal rate of return of 24.1% and payback period of 3.6 years. The initial capital costs are estimated at $823 million.
“These results support our view that the Arizaro project has the potential to be a world-class producer of lithium carbonate,” Lithium Chile CEO Steve Cochrane said in a news release. “We are excited about continued advancement of this project – a continuing journey of near-term enhancement opportunities that have already been identified.”
The Arizaro project is currently undergoing the second phase of its development, with the goal of establishing a measured resource and increasing the LCE grade on the salar. Testing of the brine samples will be done at the company’s lab in Jujuy province to determine best production processes for lithium extraction.
Shares of Lithium Chile were up by 3.9% as of 12:05 p.m. EDT following the PEA release. The company has a market capitalization of approximately C$162.9 million ($121.2m).
