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Preliminary Economic Assessment for the Bandeira Lithium Project
The PEA for the Bandeira deposit demonstrates a technically simple and highly economic mining project that places it among the lowest cost spodumene concentrate producers globally.
Bandeira PEA - Production & Economic Highlights ($USD unless otherwise stated):
- Post-tax Net Present Value (“NPV”)8% of $1.6 billion (approximately C$2.2 billion)
- Post-tax Internal Rate of Return (“IRR”) of 121%
- Underground mine scenario processing 1.3Mtpa of ore over a 20-year mine life
- After-tax payback of 14 months
- Avg. LOM annual production of 217,700t of high-quality spodumene concentrate at 5.5% Li2O (“SC5.5”) equivalent (187,230 tpa SC5.5, in addition to 56,860 tpa of spodumene tails concentrate at 3% Li2O, or “SC3”)
- Total capital expenditure (“CAPEX”) of $233 million (including a 25% contingency)
- Pre-tax annual average free cash flow of $243 million
- All-in LOM operating costs (“OPEX”) of $349/t of spodumene concentrate SC5.5
The PEA considers the following updated Mineral Resource Estimate for Bandeira:
- Measured & Indicated: 13.72Mt at 1.40% Li20 (474,892t LCE) representing a 196% increase in tonnes compared to the June 2023 MRE for Bandeira of 4.63Mt at 1.35% Li20 (154,198t LCE)
- Inferred: 15.79Mt at 1.34% Li20 (523,118t LCE)
The NI 43-101 compliant PEA was completed by independent Brazilian consultancy, GE21 Consultoria Mineral Ltda ("GE21"), with support of SNC Lavalin.
Bandeira Project PEA Overview
The Bandeira Project covers 175 hectares within Lithium Ionic’s large land package of 14,182 hectares and is located between the towns of Araçuaí and Itinga within Brazil’s “Lithium Valley” - a hard rock lithium district that is quickly emerging as an important global lithium producer.
| Project Economics | |
| Post - Tax NPV8 | $1.6 billion |
| Post - Tax IRR | 121% |
| Pre - Tax NPV8 | $2.3 billion |
| Pre - Tax IRR | 163% |
| Annual Revenue – Average | $337 million |
| Annual Free Cash Flow | $243 million |
| Payback | 14 months |
| Economic Assumptions & Parameters | |
| SPO 5.5% Li2O Price, CIF China | $1,859/t |
| SPO 3.0% Li2O Price, CIF China | $865/t |
| Exchange rate | US$5.00 /R$ |
| Discount Rate | 8% |
| Production Profile | |
| Total Project Life (LOM) | 20 years |
| Total LOM production (ore mined) | 22.9 Mt |
| Nominal Plant Capacity | 1.3 Mtpa |
| Average plant throughput | 1.26 Mtpa |
| Run-of-Mine grade, Li2O (ore diluted) | 1.23% |
| Run-of-Mine underground mine dilution | 16.8% |
| Waste generation Average | 439 ktpa |
| SPO Annual Production @ 5,5% Li2O | 187 ktpa |
| SPO Annual Production @ 3,0% Li2O | 56 ktpa |
| SPO Annual Production @ 5.5% Li2O Equivalent | 218 ktpa |
| SPO 5,5% Li2O metallurgical recovery | 67.0% |
| SPO 3,0% Li2O metallurgical recovery | 10.7% |
| SPO 5,5% Li2O mass recovery | 15.2% |
| SPO 3,0% Li2O mass recovery | 4.5% |
| Project Capital Costs | |
| Mine (Development + Equipment’s + Pre-Production) | $72.5 million |
| Plant | $80.5 million |
| Environmental | $2.9 million |
| Engineering Services | $20.0 million |
| General Infrastructure & Others | $10.3 million |
| Contingency (25%) | $46.6 million |
| Total Capital Cost Estimate | $232.8 million |
| SUDENE Incentive tax benefit over first 10 years | 75% |
| Operating Costs (OPEX) | |
| Operating costs (based on ore processed) | $61/t ore |
| Mining | $45/ t ore |
| Processing + Tailings handling | $12/ t ore |
| SG&A | $4/t ore |
| Operating costs (based on SPO 5.5 concentrate produced) | $349/t SPO 5.5E |
| Mining | $258/t SPO 5.5E |
| Processing + Tailings handling | $68/t SPO 5.5E |
| SG&A | $23/t SPO 5.5E |
| Transportation costs to customer destination (Mine in Itinga - Araçuaí to Shanghai Port, China) |
$120/t SPO |
Mining
The Bandeira project engineering design contemplates dual underground mining operations. The primary orebodies, accounting for approximately 90% of the deposit, are proposed to be extracted using a bottom-up “sublevel stoping” method (Bandeira Sublevel Mine, “BSL mine”). Simultaneously, the secondary southeast orebody, comprising approximately 1.5 million tonnes, is expected to be mined using “room-and-pillar” technique (Bandeira Room and Pillar, “BRP mine”).
The BSL mine has been planned with two declines, extending along a NE/SW mineralized trend spanning 1.0 km. It is divided into 12 panels, each measuring 55 meters, and consists of two sublevels (see Figure 3).
The BRP mine features a single panel with approximate dimensions of 380 meters in length, 330 meters in width, and 10 meters in height. Access to the ore chamber will be provided through five crosscuts originating from the southern decline. Once fully operational, the BSL and BRP mines are expected to achieve a combined production of approximately 1.3 million tonnes per annum. Figure 4 shows the annual plant feed along with Li2O grade.
Proposed Project Layout and Infrastructure
PEA Mine Plan and Schedule with Li2O, %
Mineral Processing
The mineral processing flowsheet is structured around a two-stage crushing circuit (comprising a Jaw crusher and Gyratory Cone crusher), ore size classification, the implementation of an ore sorter for coarse and medium materials, and the utilization of DMS (Dense Media Separation) for coarse and medium materials. Additionally, fines are subjected to gravity concentration with spirals. For a visual representation of the process, please refer to Figure 5, while Table 1 provides the specific design criteria for mineral processing.
The underground mine is anticipated to yield ore with an average Li2O grade of 1.23% over the Life of Mine (LOM), accounting for dilution at 16.8%. The ore sorting process will effectively purify the ore by removing undesirable dilution and non-lithium-bearing minerals like albite, feldspar, and quartz. This enrichment process will improve the lithium oxide grade to approximately 1.50%, ensuring a higher feed for the DMS I and II units. Based on the preliminary testwork program, Li2O recovery is projected to reach 67%, with an additional 10.7% achieved through gravity concentration in the fines fraction.
Block diagram for the Bandeira Process Flowsheet
See the press release dated October 19, 2023, related to the PEA HERE.