Avalon announces results of positive preliminary economic assessment for its Separation Rapids lithium project

Avalon Advanced Materials | September 28, 2016 | 12:10 am Battery Metals Canada Lithium Rare Earth 

Toronto, ON – Avalon Advanced Materials Inc. (TSX: AVL and OTCQX: AVLNF) (“Avalon” or the “Company”) is pleased to announce the completion of a positive Preliminary Economic Assessment (“PEA”) for its 100% owned Separation Rapids Lithium Project (the “Project”), Kenora, Ontario. The PEA was prepared under the oversight of Micon International Limited (“Micon”).

The Separation Rapids Lithium Deposit (the “Deposit”) was originally evaluated by Avalon in 1997-2000 as a potential producer of lithium minerals for glass-ceramics under a pre-feasibility study (which was also prepared by Micon). The purpose of this 2016 PEA was to investigate the potential for recovery of a lithium product suitable for the battery market from the same lithium resource, and the results confirm a technically viable process and positive economics for the recovery of a battery-grade lithium hydroxide product.

Highlights

  • An average mining rate (open pit) of 950,000 tonnes per year would yield an average annual production of 14,600 tonnes of lithium hydroxide for 10 years and 100,000 tonnes per year of feldspar mineral concentrate for 20 years, as it would continue to be recovered from previously processed material for an additional 10 years after the initial 10 year mine life.
  • The discounted cash flow (“DCF”) analysis yields a 19% internal rate of return (“IRR”) on a pre-tax basis and a 16% IRR on an after-tax basis, assuming 100% equity financing. The Project’s net present value (“NPV”) at an 8% discount rate is CAD$343 million pre-tax and CAD$228 million after-tax.
  • Total Project construction capital costs are estimated at $514 million, which is inclusive of $86 million in contingencies and $7 million in sustaining capital.
  • The average lithium hydroxide price assumption used for this PEA was US$11,000/tonne and the CAD:USD exchange rate assumption was US$1.00 = CDN$1.30.
  • Measured and Indicated Mineral Resources, as currently delineated, total 8.0 million tonnes averaging 1.29% lithium oxide and 38% feldspar. Inferred Mineral Resources contribute an additional 1.63 million tonnes at 1.42% lithium oxide to a maximum vertical depth of 260 metres. The deposit is open to depth and along strike.

Full press release:

[gview file=”https://mining.com/wp-content/uploads/2016/09/Avalon-NR-16-10-Sep-Rapids-PEA.pdf”]

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