American Lithium wins Peru court battle

American Lithium (TSXV: LI; US-OTC: AMLIF) surged by nearly 20% after winning a legal battle in Peru that’s been holding up one of world’s largest and potentially lowest-cost uranium developments for years.

Petitions filed by the Peru’s Ministry of Energy and Mines in December 2023 challenging 32 disputed concessions on the Macusani project were “unfair, inadmissible and unacceptable,” the country’s Supreme Court said Thursday in its unanimous decision. 

American Lithium had maintained there were no grounds for the Supreme Court to assume jurisdiction. The decision, which its executive chairman Andrew Bowering called a “significant development,” ends what it considers to be an “unnecessary legal process” that first began seven years ago.

“It is important to re-emphasize that at no point did the company lose title to the 32 concessions under dispute,” Bowering said in the release. “We can now focus on advancing these high-quality projects without this uncertainty.” 

America Lithium jumped 18% to 47¢ a share by mid-Thursday in Toronto nearing a five-month high. The company has a market capitalization of $119 million.

Large uranium project

The disputed concessions form part of American Lithium’s $300-million (C$412-million) capex Macusani project, which the Vancouver-based miner says could have a post-tax net present value at an 8% discount of $603 million, according to a 2018 preliminary economic assessment. It showed an internal rate of return of 41% and 1.8-year payback.

The study outlined a 10-year mine at Macusani producing about 70 million lb. of uranium oxide (U₃O₈) from five near-surface deposits. The study is based on a total defined resource of 95.2 million indicated tonnes grading 248 parts per million U₃O₈ containing 51.9 million lb. U₃O₈, and 130 million inferred tonnes grading 251 ppm for 72.1 million lb. U₃O₈.

American Lithium acquired Macusani as part of its merger with Plateau Energy Metals in 2021. The latter had been working on the project since 2007 . Following the merger, the company intended to spin out its uranium assets, but that plan was put on hold due to market conditions.