Noram Lithium PEA places Zeus project in Nevada at $1.29bn NPV

Noram Lithium (TSXV: NRM) has released the results of  a preliminary economic assessment for its wholly owned Zeus lithium project in Nevada.

The Zeus property is located in Clayton Valley, less than 1.6 km to the east of Albemarle’s (NYSE: ALB) Silver Peak mine, which is currently the only lithium production facility in the United States.

According to the NI 43-101 compliant PEA, the Zeus lithium project has an estimated after-tax net present value (NPV) of US$1.3 billion and an internal rate of return (IRR) of 31% (using an 8% discount rate).

The study estimated initial capital costs of US$528 million and an after-tax payback period of 3.23 years.

Gross revenue for the mine is forecast to run to US$303.4 million a year.

Once in full operation, the mine will be producing at a rate of about 17,000 tonnes per day.  The production schedule uses ore from the first 11 phases, resulting in a 40 year mine life. Production over the life of the mine is estimated at  245.4 million tonnes averaging 1,093 parts per million lithium.

The stripping ratio for the mine is low at an average of 0.07:1 over the life of the mine. Mining consists of a truck and shovel method, with blasting being unnecessary due to the softness of the ore.

“This study represents the most significant milestone to date for Noram and establishes us among limited peers as the newest low cost, high-grade, near-term lithium producer in North America,” Sandy MacDougall, Noram’s CEO  commented in a news release.

“I am very pleased with what our team has achieved quickly, on schedule, and at the opportune time considering current and forecasted demand for lithium carbonate,” he added. “This initial economic assessment is the most significant step to date towards our goal of lithium production and provides the market with a benchmark to evaluate our project’s viability and value compared with other lithium developers.” 

Noram now anticipates completing a prefeasibility study in 2022.