Lithium Chile‘s (TSXV: LITH; US-OTC: LTMCF) Salar de Arizaro project in northern Argentina could produce 25,000 tonnes per year of battery-grade lithium carbonate equivalent (LCE) over 19 years, according to a preliminary economic assessment (PEA) released on Tuesday.
The study estimates initial capital costs at US$823 million, with an after-tax net present value of US$1.1 billion (at an 8% discount rate), an internal rate of return of 24.1%, and a payback period of 3.6 years. Operating costs are pegged at US$5,197 per tonne of LCE.
“These results support our view that the Arizaro project has the potential to be a world-class producer of lithium carbonate,” said Steve Cochrane, CEO of Lithium Chile. “We are excited about continued advancement of this project – a continuing journey of near-term enhancement opportunities that have already been identified.”
The PEA is based on indicated resource of 1.5 million tonnes LCE grading 278 mg per litre and an inferred resource of 1.7 million tonnes of LCE at a grade of 360 mg per litre. The resource was increased by 28% in June following diamond drilling at the site, located in Salta province.
Arizaro, the company’s most advanced project is currently undergoing the second phase of its development, with the goal of establishing a measured resource and increasing the LCE grade on the salar. Testing of the brine samples will be done at the company’s lab in Jujuy province to determine best production processes for lithium extraction.
The project is the Calgary-based explorer’s most advanced asset, and a resource update for Arizaro, released last December raised the LCE tonnage by 81%
Shares of Lithium Chile were up by 1.3% to 77¢ in mid-afternoon in Toronto on Tuesday. The company has a market capitalization of $158.7 million. Its shares have traded in a 52-week window of 45¢ and $1.13.
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