Lithium Power International: updated Definitive Feasibility Study

Lithium Power International achieves outstanding results delivered by the Maricunga Lithium Brine Project in its updated definitive feasibility study.

Lithium Power International Limited is pleased to release the results of its updated Definitive Feasibility Study (DFS) for the Stage One Maricunga Lithium Brine project. The Maricunga Stage One DFS delivers $1.4bn NPV (after tax) at an 8% discount rate. An IRR of 39.6% and a two-year payback period.

Stage one project

The Stage One Project is owned and operated by Minera Salar Blanco S.A, and MSB is in turn collaboratively owned by Lithium Power International (51.55%); Minera Salar Blanco SpA (31.31%); and Bearing Lithium Corp (17.14%).

The associated report prepared by Worley and Atacama Water for MSB is to provide a National Instrument 43-101 compliant Definitive Feasibility Study of its ‘Stage One Project’ located in Salar de Maricunga in the Atacama Region of northern Chile.

The report provides an independent updated Mineral Reserve estimate and a technical appraisal of the economic viability of the production of an average of 15,200 t/a of battery grade lithium carbonate over a 20-year mine-life from the lithium contained on the ‘Old Code’ mining concessions (OCC) owned by MSB, based on additional exploration work carried out to 400m depth during 2021.

The highlights of the study:

  • The updated Maricunga Stage One Lithium Brine project’s Definitive Feasibility Study (DFS) supports 15,200 tonnes per annum production of lithium carbonate (LCE) for 20 years.
  • Project NPV[1] (leveraged basis) of $1.4bn (after tax) at 8% discount rate, providing an IRR of 39.6% and a 2-year payback. Estimated steady-state annual EBITDA of $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 $419m, indirect costs at $145m and contingency costs at $62m to provide a total project CAPEX of $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, private funds for debt financing, and future equity financing of the project. Finance process will continue in coming months.
  • Updating of the EPC proposals will commence during Q1. Final Investment Decision expected for 2022, with construction to start immediately after.

Lithium Power International Limited, through its Joint Venture Company, Minera Salar Blanco is pleased to provide details of the updated Definitive Feasibility Study for its Maricunga Stage One lithium brine project in northern Chile. The study confirms that Maricunga Stage One could be one of the world’s lowest-cost producers of lithium carbonate, with a solid ESG strategy to support a sustainable future.

Lithium Power International’s Chief Executive Officer

“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,” commented Cristobal Garcia-Huidobro, the Chief Executive Officer at LPI.

“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.”

For further information and to read the company’s full ASX release with the results of its updated Definitive Feasibility Study for the Stage One Maricunga Lithium Brine project, visit Lithium Power International LTD.

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