Dual-listed Desert Lion Energy Inc.’s preliminary economic assessment or PEA for its Namibia-based lithium project showcases compelling project economics.
The PEA covers mining, concentrate and lithium carbonate production – and the capital cost for the Desert Lion lithium project has been determined amongst the lowest of lithium development peers.
- Cash cost of lithium carbonate of US$4 080/t and lepidolite (lithium) concentrate of $141/t, in each case including by-product credits
- Initial direct capital costs of $275 million for mine, concentrator and lithium carbonate conversion plant, including by-product circuits (including a contingency of $43 million (15%))
- Low capital intensity for lithium carbonate of $13 750/annual tonne of production of battery grade lithium carbonate
- $144 million pre-tax NPV (8% discount rate)
- 29% pre-tax internal rate of return
- Payback period of ~2.5 years
- Life of mine revenues of $852 million
- Average sales price of $13 000/t of lithium carbonate
Tim Johnston, CEO of Desert Lion comments,
"We are very pleased with the results of the preliminary economic assessment which confirm management's belief in the benefits associated with the project's at or near surface mineralisation, proximity to high quality existing infrastructure and the low-cost operating environment in Namibia.”
“The PEA demonstrates the compelling economics of the project, highlighted by low capital costs, low operating costs and high earnings."
The PEA details the production of lepidolite (lithium) concentrate at the mine site with final processing of such concentrate into battery grade lithium carbonate near the Port of Walvis Bay.
The mine site is located approximately 20 km from the town of Karibib and approximately 220 km from the major Port of Walvis Bay connected via the national highway and state-owned railway.
The vertically integrated plant encompasses the development of a mine, concentrator and lithium carbonate plant capable of producing 20 000 tpa of battery grade lithium carbonate.
By-products include 35 250 t of petalite concentrate per year and 290 t of tantalum concentrate per year. The development plan will continue to be assessed during the next stage of work to be completed by the company which is planned to include further exploration results and an assessment of the lithium market conditions.