- Estimated post-tax NPV (8% discount rate) of EUR
1,194m (USD1 1,246m).
- Estimated post-tax IRR of 22.3%.
- Estimated annual EBITDA of EUR
293m (USD 305m); after-tax
annual cash flow of EUR
188m (USD 199m).
- Estimated average battery-grade lithium hydroxide (LHM)
prices of 31,771 USD/t, and
average. SC6 prices of 1,966
USD/t.
- Estimated initial capital costs of EUR 730m (USD
762m); payback of 3.6 years after start of
production.
- Preparation for construction has commenced, start of
battery-grade LHM production planned for Q1'2026.
- Deutsche Bank mandated as placement agent for Converter
equity financing.
VANCOUVER, BC, May 14, 2023
/CNW/ - Rock Tech Lithium Inc. (TSXV: RCK) (OTCQX: RCKTF)
(FWB: RJIB) (WKN: A1XF0V) (the "Company" or "Rock Tech") is
pleased to announce that it has reached a significant milestone in
the preparation of construction of its lithium hydroxide converter
and refinery plant in Guben, Germany, with the completion of the Front-End
Loading stage 3 study ("FEL3"). The study includes detailed
specifications for construction, commissioning, start-up, and
operation, along with a purchase-ready major equipment cost
estimates. The study was finalized by the Company's German
subsidiary Rock Tech Guben GmbH in collaboration with engineering
partner AFRY AB, paving the final way for the Project's
construction phase. The profitability has been estimated to have a
post-tax NPV (8%) of EUR 1,194m
(USD 1,246m) - an increase of 43 per
cent compared to the previous Bankable Project
Study2. Additionally, Rock Tech has
appointed Deutsche Bank AG as placement agent for the Company's
Converter-related financing.
_____________________________________
|
1 Please
note that all USD to EUR conversions in this document are based on
an average exchange rate of USD to EUR = 0.9579, and for CAD to USD
= 0.7617
|
2 "BPS",
disclosed on 04 Nov 2022 within the release "Rock Tech Lithium
completes Bankable Project Study for its Guben Converter
Project"
|
|
REMARKS AND SUMMARY OF THE STUDY
RESULTS
With finalization of the FEL3 study, basic engineering is
completed, and the Project is prepared to move to construction
phase including final procurement negotiations and detailed
engineering design.
The FEL3 study estimates the project's profitability at a
post-tax NPV (8%) of EUR1,194m
(USD 1,246m) - an increase of 43 per
cent compared to the Bankable Project Study. In particular, the
increased long-term price assumptions of analysts for lithium
hydroxide caused by the continued forecast of very high demand,
lead to a higher basis for the margin calculations.
The FEL3 results in a much more accurate cost estimate with a
variance of only +/-10% (AACE Class 2) and is based on existing
definite offers of mainly European suppliers and service providers
supporting purchase-ready major equipment cost estimates. Despite
this enhanced accuracy, it can be clearly noted that the planning
of capital expenditures remains stable and only increases by 4%,
mainly due to inflation.
Execution planning and basic engineering is now comprised for
all plant areas. Efforts involved significantly increased levels of
basic engineering deliverables, and the preparation of cost
estimates. Metallurgical testwork, which was in progress at the
time of the BPS publication, has now been completed and was
provided for expert review and interpretation by industry
specialists.
Completion of these tasks has allowed for finalization of plant
equipment selection and flowsheets. Lithium recovery assumptions
made in the BPS have proven to be accurate with no changes required
to production assumptions. A forward metallurgical testing work
plan has been developed which will perform final optimizations,
including bench and pilot scale testing, with material from the
selected spodumene concentrate supplier. A competitive tendering
process has been kicked off, with the assistance of an independent
expert, to appoint an Engineering, Procurement and Construction
Management (EPCM) partner for project execution.
Rock Tech is also pleased to announce that it has selected
Deutsche Bank AG as a highly experienced placement agent with a
proven track record in major equity financings.
"We are very pleased to have partnered with Deutsche Bank, a
leading global investment bank, to lead our equity raising and
partnership activities for the Converter financing. The completion
of our latest detailed engineering study further substantiates the
profitability and attractiveness of our project, and we are
confident the next months will yield strong financing
partnerships." Sonja Rossteuscher,
Rock Tech's Chief Financial Officer says.
Rock Tech's lithium hydroxide converter and refinery plant in
Guben, Germany is planned for a
production capacity of 24,000 tonnes of battery-grade lithium
hydroxide monohydrate per year. It is going to be able to process
spodumene concentrates from various origins, be it from the
Company's own mineral project Georgia Lake, Ontario, Canada or, for example, from
Australia. Rock Tech has obtained
the first partial permit ("TG1") issued by the Brandenburg State
Office for Environment in March 2023.
The permit allows start of construction for all non-process
buildings and site infrastructure and approves the general plant
layout and functions for the spodumene to lithium hydroxide
conversion. The Company submitted the second partial permit ("TG2")
in November 2022 and expects approval
by Q4 2023. Targeted start of commissioning remains on track for
Q4' 2025, with first battery grade LHM being produced in Q1'
2026.
KEY METRICS
Key economic results of the FEL3 are reported below:
KEY METRICS AND
ASSUMPTIONSA
|
After-Tax
NPVB
|
EUR
1,194m
|
USD
1,246m
|
After-Tax
IRR
|
22.3 %
|
|
Payback
Period
|
3.6
years
|
|
Initial Capital
Expenditure
|
EUR
730m
|
USD
762m
|
Annual Operating Cost per tonne
LHMC
|
EUR
5,033
|
USD
5,252
|
Average spodumene
concentrate price (6% Li2O) paid
|
EUR 1,
883/t
|
USD 1,
965/t
|
Average LHM price
receivedD
|
EUR
30,435/t
|
USD
31,771/t
|
Notes to the
table:
|
|
|
A.
|
Key metrics are
calculated on nameplate annual production of 24,000 tonnes of LHM
over 25-year life of project (as applicable). For more details on
exchange rates see footnote 1.
|
B.
|
Discount rate of
8%.
|
C.
|
Excluding costs for
spodumene. Operating costs are calculated on nameplate annual
production of 24,000 tonnes of LHM over 25-year life of
project.
|
D.
|
Based on market
forecasts projected over 25-year life of project.
|
|
|
COST ESTIMATES
The FEL3 initial capital costs have increased by 4% in Euro
terms compared with the BPS as the last published study
phase3. Improvements to the capital
expenditure (CAPEX) estimate include improved engineering completed
during the FEL3, more developed construction planning, and a
refined understanding of freight requirements; all of which served
as the basis for the FEL3 estimate and support a Class 2 level of
certainty.
The further engineering process, to be done in close
coordination with an EPCM contractor, will provide opportunities to
further de-risk the CAPEX estimate by highlighting key areas where
further negotiation with preferred suppliers will yield improved
results. It is planned that the procurement team will work in
conjunction with the selected financing groups to ensure a high
level of confidence can be obtained from supplier pricing.
This will allow the Company to make the Final Investment Decision
in the second half of 2023.
On behalf of the Board of Directors,
Dirk
Harbecke
Chairman & CEO
____________________________
|
3 Given that
the project is being realized in Germany and is mainly European
financed, the increase in costs is given here in EUR. An
information of the increase in USD would be arithmetically higher
and would amount to 11.6%. . 2.6% of this increase are attributable
to higher material quantities and risen unit rates. The remaining
9.0% of the increase is caused by devaluing foreign exchange rate
changes of EUR and USD.
|
|
ABOUT ROCK TECH
Rock Tech is a cleantech company with operations in Canada and Germany on a mission to produce lithium
hydroxide for electric vehicle batteries. The Company plans to
build lithium converters at the door-step of its customers, to
guarantee supply-chain transparency and just-in-time delivery,
beginning with the Company's proposed lithium hydroxide merchant
converter and refinery facility in Guben, Germany. To close the most pressing gap in the
clean mobility story, Rock Tech has gathered one of the strongest
teams in the industry. The Company has adopted strict
environmental, social and governance standards and is developing a
proprietary refining process aimed at further increasing efficiency
and sustainability. Rock Tech plans to source raw material from its
wholly-owned Georgia Lake spodumene project located in the Thunder
Bay Mining District of Ontario,
Canada, as well as procuring it from other responsibly
producing mines. In the years to come, the Company expects to also
source raw material from discarded batteries. Rock Tech's goal: to
create a closed-loop lithium production system.
www.rocktechlithium.com
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY NOTE CONCERNING
FORWARD-LOOKING INFORMATION
The following cautionary statements are in addition to all other
cautionary statements and disclaimers contained elsewhere in, or
referenced by, this press release.
Certain information set forth in this press release constitutes
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable Canadian securities
laws, which information is based on Rock Tech's current
expectations, estimates, and assumptions in light of its experience
and perception of historical trends. All statements other than
statements of historical facts may constitute forward-looking
information. Often, forward-looking information can be identified
by the use of words or phrases such as "estimate", "project",
"anticipate", "expect", "intend", "believe", "hope", "may" and
similar expressions, as well as "will", "shall" and all other
indications of future tense. All forward-looking information set
forth in this press release is expressly qualified in its entirety
by the cautionary statements referred to in this section.
In particular, this press release contains forward-looking
information pertaining to: expectations concerning the Converter,
including the design and features of the Converter, as well as the
expected costs, capital expenditures, timing and outcomes thereof;
statements regarding the Company's future plans, estimates, and
schedules relating to the Converter, including the anticipated
timing of future activities taken in support of the development
thereof; Rock Tech's expectations regarding the FEL3 study
including the related activities, findings and uses thereof;
potential financing arrangements; the expected economic performance
of the Converter and anticipated production of LHM and related
processing methods employed; the estimated capital and operating
costs of the Converter; the anticipated timing and outcomes of a
final investment decision, construction activities and
commissioning of the Converter; statements regarding the Company's
sustainability and ESG related goals and strategy, including the
benefits and achievement thereof and future actions taken by the
Company in relation thereto; expected regulatory processes and
outcomes, expectations regarding non-Lithium by-products and the
production and uses thereof; expectations regarding the electric
vehicle industry, including the demand for and pricing of LMH and
the benefits therefrom; Rock Tech's opinions, beliefs and
expectations regarding the Company's business strategy, development
and exploration opportunities and projects; and plans and
objectives of management for the Company's operations and
properties.
The forward-looking information contained in this press release
also includes financial outlooks and other forward-looking metrics
relating the Company and the proposed Converter, including
references to financial and business prospects, future results of
operations, performance and cash follows (including estimated NPV
and IRR). Such information, which may be considered future oriented
financial information or financial outlooks within the meaning of
applicable Canadian securities laws (collectively, "FOFI"), has
been approved by management of the Company as of the date hereof.
Such FOFI is based on assumptions which management believes is
reasonable as of the date hereof, having regard to the industry,
business, financial conditions, plans and prospects of Rock Tech,
including the FEL3 study. These projections are provided to
describe the prospective performance of the Converter and readers
are cautioned that such information may not be appropriate for
other purposes. Further, such information is highly subjective and
should not be relied on as necessarily indicative of future results
and actual results may differ significantly from such projections.
FOFI constitutes forward-looking statements and is subject to the
same assumptions, uncertainties, risk factors and qualifications as
set forth below.
Forward-looking information is based on certain assumptions,
estimates, expectations and opinions of the Company and in certain
cases, third party experts, that are believed by management of Rock
Tech to be reasonable at the time they were made. This
forward-looking information was derived utilizing numerous
assumptions regarding, among other things: regulatory decisions and
outcomes; anticipated construction costs, schedules and completion
dates; access to capital markets and other sources of financing;
the supply and demand for, deliveries of, and the level and
volatility of prices of, intermediate and final Lithium products;
future exchange and interest rates; general business and economic
conditions; the costs and results of development, exploration and
operating activities; Rock Tech's ability to procure supplies and
other equipment necessary for its business; and the accuracy and
reliability of technical data, forecasts, estimates and studies.
The foregoing list is not exhaustive of all assumptions which may
have been used in developing the forward-looking information. While
Rock Tech considers these assumptions to be reasonable based on
information currently available, they may prove to be incorrect.
Forward-looking information should not be read as a guarantee of
future performance or results. In addition, forward-looking
information involves known and unknown risks and uncertainties and
other factors, many of which are beyond Rock Tech's control, that
may cause actual events, results, performance and/or achievements
to be materially different from that which is expressed or implied
by such forward-looking information. Risks and uncertainties that
may cause actual events, results, performance and/or achievements
to vary materially include: the cost and availability of, and
inflationary pressure on, labour, equipment and materials; the
Company's ability to access funding required to invest in available
opportunities and projects (including the proposed Converter) and
on satisfactory terms, the current and potential adverse impacts of
the COVID-19 pandemic and ongoing geopolitical hostilities; the
risk that Rock Tech will not be able to meet its financial
obligations as they fall due; adverse changes in commodity prices,
exchange rates and market prices of Rock Tech's securities; Rock
Tech's ability to attract and retain skilled staff and to secure
feedstock; unanticipated events and other difficulties related to
construction, development and operation of the Converter, the cost
of compliance with current and future environmental and other laws
and regulations; title defects; Rock Tech's history of losses;
adverse impacts of climate change and other risks and uncertainties
described from time to time in Rock Tech's public disclosure
documents available on the Company's SEDAR profile at
www.sedar.com, including those discussed under the heading "Risk
Factors" in Rock Tech's most recently filed Management Discussion
and Analysis and Annual Information Form, respectively. Such risks
and uncertainties do not represent an exhaustive list of all risk
factors that could cause actual events, results, performance and/or
achievements to vary materially from the forward-looking
information. We cannot assure you that actual events, results,
performance and/or achievements will be consistent with the
forward-looking information and management's assumptions may prove
to be incorrect.
Forward-looking information reflects Rock Tech management's
views as at the date the information is created. Except as may be
required by law, Rock Tech undertakes no obligation and expressly
disclaims any responsibility, obligation or undertaking to update
or to revise any forward-looking information, whether as a result
of new information, future events or otherwise, to reflect any
change in Rock Tech's expectations or any change in events,
conditions or circumstances on which any such information is based.
Given these uncertainties, readers are cautioned not to rely on the
forward-looking information set forth in this press release.
Disclaimer. The FEL3 does not constitute a preliminary economic
assessment, preliminary feasibility study or feasibility study
within the definitions adopted by the Canadian Institute of Mining,
Metallurgy and Petroleum, as it relates to a standalone Lithium
hydroxide Converter and does not concern a mineral project of Rock
Tech. As a result, disclosure standards prescribed by National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects are not applicable to the scientific and technical
information included in the FEL3 or this press release.
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