Lithium developer Piedmont Lithium has welcomed the positive definitive feasibility study (DFS) on the North American Lithium (NAL) project and the increased resource at the Moblan lithium project, both in Quebec.
Piedmont’s joint venture partner Sayona Mining at the end of last week released the DFS for the NAL project, which increased the targeted production, but decreased the project’s mine life and eliminated the underground mining potential at the project.
The DFS estimated a mine-life of 20 years for NAL, compared with the 27 years estimated in the 2022 prefeasibility study (PFS), while the average annual life-of-mine concentrate production has increased from 163 266 t/y to 190 039 t/y.
With the increase in the spodumene concentrate market price and the higher production, the project’s pre-tax net present value has increased from C$952-million to just over $2.-billion, while the internal rate of return has increased from 140% to 4 701%.
All-in sustaining costs have increased slightly from the C$927/t considered in the PFS to C$987/t, while total net revenue has declined from C$7.01-billion to C$6.81-billion.
As part of the DFS and mine restart efforts, Sayona undertook a strategic review of mineral resources and ore reserves to create opportunities to focus on higher-grade, open-pit material and to improve project net present value. The revised block model has resulted in a reduction in ore reserves and certain indicated resources have been reclassified as inferred resources based on new model interpretation.
The study contemplates a mine life of 20 years, reduced from the PFS estimate of 27 years, through the elimination of underground mining.
NAL’s restart has tracked on schedule and within budget, with the operation already having produced more than 3 000 t of saleable spodumene concentrate as of the end of March 2023. The first lithium shipment is expected to occur in July 2023, with Sayona targeting total production between 85 000 t and 115 000 t during the first half of 2024.
“This DFS demonstrates the benefits of our hub strategy in Abitibi, with NAL proving to be one of the lowest cost and highest returning investments in the lithium industry. We are now in the process of successfully de-risking the NAL operation, which will generate long‐term, sustainable returns for shareholders together with providing new jobs and investment for Québec,” Sayona MD Brett Lynch said at the end of last week.
“Furthermore, we intend to expand upon this strong foundation as we now approach the move towards downstream processing. Sayona aims to become the first and the only, fully integrated, lowest carbon footprint lithium chemical producer for delivery into North America.”
Piedmont COO Patrick Brindle said on Wednesday that the results of the DFS underscored NAL’s role as a significant lithium producer positioned to meet the requirements of the Inflation Reduction Act of 2022.
“Production is ramping up at NAL, and we look forward to making initial shipments to our customers LG Chem and Tesla later in 2023,” he added.
Meanwhile, Sayona on Wednesday announced an initial Joint Ore Reserves Committee compliant resource estimate for the Moblan lithium project, including a maiden resource for the South dyke discovery.
The project is now estimated to host a measured, indicated and inferred resource of 51.4-million tonnes at 1.31% lithium oxide, representing one of North America’s single largest lithium resources.
Sayona told shareholders that opportunities existed to expand and build on this mineral resource through further exploration, while diamond drilling could potentially upgrade some of the inferred mineral resource to the indicated category.
“Speed and tonnes are crucial and with our NAL operation in production, we are now bringing significant added resources to the market. Moblan now represents one of the single largest lithium resources in North America, justifying our move to fast‐track a major drilling program that has delivered a resource within just a year of acquisition,” Lynch said.
“Sayona already has the leading advanced lithium resource base in North America and this latest expansion further entrenches our competitive advantage, particularly given our projects’ favourable access to infrastructure, market proximity and availability of low‐cost, sustainable hydropower.
“Together with our established Abitibi lithium hub in the south, Sayona has quickly developed two emerging centres of lithium production amid surging demand from North America’s electric vehicle and battery revolution. As we progress these projects from spodumene concentrate production towards downstream processing, the significance of these assets will only increase as the market scrambles for supply.”