Grounded Lithium Files Preliminary Economic Assessment Report for the Kindersley Lithium Project - Phase 1
- After-tax net present value of US$1.0 billion with a 4X profitability index
- After-tax internal rate of return of 48.5%
- Economic resiliency under a range of key project variables
- Payout of only 3.7 years, inclusive of a 1.5 year design and construction phase
- Inferred mineral resources considered too geologically speculative to have economic considerations applied to them
- No certainty the results of the Kindersley Lithium Project outlined by the PEA will be realized
The PEA independently assessed the economics of the KLP-Phase 1 based on a
- After-tax net present value ("NPV") of
US using an$1.0 billion 8% discount rate and a capital investment ofUS , implying an after-tax profitability index ("PI") of nearly 4X. A PI of nearly 4X suggests a highly accretive project with torque to the upside if current spot prices for battery grade lithium material were modeled;$335 million - After-tax internal rate of return ("IRR") of
48.5% ; - Economic resiliency under a range of key project variables such as price, capital intensity and operating costs. For example,
20% variation in price fromUS /tonne LHM to either$25,000 US /tonne or$20,000 US /tonne of LHM generates after-tax IRRs of$30,000 38% and59% , respectively; and - Payout of only 3.7 years, inclusive of a 1.5 year design and construction phase. This is extremely rapid given a project of this magnitude and scope.
The PEA is based on the implementation of Koch Technologies Solutions' ("KTS") proprietary lithium extraction technology called Li-ProTM. The Company is working with officials from KTS as well as others within the larger Koch Industries group to develop a field pilot plan with associated commercial terms. The Company will communicate efforts in this regard as they become finalized.
The PEA presents data provided by several leading experts in their respective fields, namely Sproule Associates Limited, Grey Owl Engineering, Codeco - Vanoco Engineering Inc., Tundra Engineering Inc. and Fracture Modeling Inc.
The economic analysis of the PEA is based on the following main assumptions:
- realized sales price of USD
per tonne of LHM;$25,000 - annual production of 11,000 tonnes per year of LHM;
- commerciality of KTS' Li-Pro™ lithium extraction technology;
- minimal pre-filtering expenditures due to the absence of hydrocarbons and H2S;
- large diameter wellbores to mitigate pressure loss due to friction and permit installation of large volume electrical submersible pumps; and
- estimated operating and capital costs for the project based on the most current industry data available inclusive of recent strong inflationary pressures on facilities and labour.
The PEA is a preliminary cost estimate and includes inferred mineral resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves under National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). There is no certainty the results of the KLP outlined by the PEA will be realized.
GLC is a publicly traded lithium brine exploration and development company that controls approximately 4.2 million metric tons of lithium carbonate equivalent of inferred resource over our focused land holdings in
Scientific and technical information contained in this press release has been prepared under the supervision of Doug Ashton, P.Eng., Suryanarayana Karri, P. Geoph., Alexey Romanov, P. Geo., Meghan Klein, P. Eng., Dean Quirk, P.Eng., Jeffrey Weiss, P.Eng., Chad Hitchings., P.L. Eng., and Michael Munteanu, P.Eng., each of whom is a qualified person within the meaning of NI 43-101.
This press release may contain forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws. The opinions, forecasts, projections and statements about future events of results, are forward looking information, forward-looking statements or financial outlooks (collectively, "forward-looking statements") under the meaning of applicable Canadian securities laws. These statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by GLC that the Company believes these forward-looking statements continue to be true as of any subsequent date. Although GLC believes that the assumptions underlying, and expectations reflected in, these forward-looking statements are reasonable, it can give no assurance that these assumptions and expectations will prove to be correct. Such statements include, but are not limited to, statements regarding the NPV and IRR of the first phase of production at the KLP, the expected realized sales price of LHM, the capital investment required for the first phase of production at the KLP, the amount of annual production at the KLP, the use of KTS' Li-ProTM lithium extraction technology, the development of a field pilot plan and announcement of same, the payout timing for the first phase of production at the KLP, and GLC's vision of becoming a best-in-class, environmentally responsible, Canadian lithium producer supporting the global energy transition.
Among the important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those indicated by such forward-looking statements are: those assumptions listed under "Project Summary" above, GLC's expectation that our operations will be in
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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SOURCE Grounded Lithium Corp
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