Standard Lithium Announces Positive Preliminary Economic Assessment
and Upgrading of Mineral Resource at Its Southern Arkansas Lithium
Brine Project
Standard Lithium Ltd. (“Standard Lithium” or the
“Company”) (TSXV: SLL) (OTCQX: STLHF) (FRA: S5L), is pleased to
announce the results of a Preliminary Economic Assessment (PEA) of
its 150,000 acre project in the south-central region of Arkansas,
USA (the “Property”). The PEA considers the production of
battery-quality lithium carbonate through a phased build-out to a
total 20,900 tonnes per annum (tpa) from the contemplated joint
venture with Lanxess Corp. (see press release dated November 12,
2018) at their three-operating bromine-processing plants. The
PEA also includes the reclassification of the existing mineral
resource to an Indicated category. The PEA was prepared by
Advisian, the consulting arm of WorleyParsons Canada Services Ltd
(Worley), a world-leading integrated engineering firm with
extensive experience in the design and construction of chemical
plants and lithium brine processing projects around the globe.
Key Points:
- Pre-tax US$1.3 Billion NPV at 8% discount rate and IRR of
42%;Total CAPEX estimate of US$437 Million including 25%
contingency of both direct and indirect capital costs, completed in
accordance with American Association of Cost Engineers (AACE)
International Class 5 standard for estimates in process
industries;
- 25 year mine-life producing 20,900 tpa battery-quality lithium
carbonate when all three plants are operational (production ramped
up to full capacity over 5 years);
- Non-optimised reagent cost per tonne lithium carbonate of
US$3,107
- All-in operating costs, including all direct and indirect
costs, sustaining capital, insurance and mine-closure costs of
US$4,319 per tonne of lithium carbonate; and
- Lanxess resource upgraded to 3,140,000 tonnes Lithium Carbonate
Equivalent (LCE) at the Indicated Category.
Dr. Andy Robinson, President and COO of Standard
Lithium commented “We are delighted that we have been able, through
close partnerships and access to large amounts of data, to bring
our Lanxess project to the stage of successful completion of the
PEA in such a short period of time. We were able to provide
to Worley a huge amount of process testing and actual operational
data from the current brine-processing plants in southern Arkansas,
and as a result, we feel that we have produced a realistic view of
the potential there, as well as a picture of the robustness of the
project. We are progressing the deployment of the
demonstration plant, and are scheduled to have it deployed to the
project site in southern Arkansas in Q3 of this year.
Real-world process optimisation from the demonstration plant,
combined with the advanced nature of this PEA, mean that we are
well positioned to release a robust feasibility study in early
2020.”
PEA Highlights:
|
Units |
Values |
Production |
tpa |
20,900[1] |
Plant Operation |
years |
25[2] |
Total Capital Cost (CAPEX) |
US$ |
437,162,000[3] |
Operating Cost (OPEX) |
US$/yr |
90,259,000[4] |
Average Selling Price |
US$/t |
13,550[5] |
Annual Revenue |
US$ |
283,195,000 |
Discount Rate |
% |
8 |
Net Present Value (NPV) Pre-Tax |
US$ |
1,304,766,000 |
Net Present Value (NPV) Post-Tax |
US$ |
989,432,000 |
Internal Rate of Return (IRR) Pre-Tax |
% |
41.8 |
Internal Rate of Return (IRR) Post-Tax |
% |
36.0 |
Notes:All model outputs are expressed on a 100%
project ownership basis[1] Total production, using existing brine
supply rates at the completion of Phase 3[2] Plant operation
commences upon completion of Phase 1[3] Includes 25% contingency of
both direct and indirect capital costs[4] Includes all operating
expenditures, including sustaining capital and allowance for mine
closure[5] Selling prices ranging between US$10,840-16,260/tonne
were modelled as part of sensitivity analysis
Capital CostsThe project is
envisaged to be implemented in three stages, corresponding with
build-out at the existing brine processing facilities. At
full build-out, with estimated production of 20,900 tpa of lithium
carbonate, the direct capital costs are estimated at US$204
Million, with indirect costs of US$146 Million. A contingency
of 25% was applied to both direct and indirect costs.
Project Phase |
Item |
Direct Cost US$ |
Indirect Cost US$ |
Contingency US$ |
CAPEX US$ |
Phase 1 South Plant |
South Lithium Extraction Plant, Train 1 Carbonate Plant and
Ancillary Infrastructure |
$79,959,000 |
$56,978,000 |
$34,234,000 |
$171,171,000 |
Phase 2 West Plant |
West Lithium Extraction Plant, Train 2 Carbonate Plant and
Ancillary Infrastructure |
$74,355,000 |
$54,587,000 |
$32,236,000 |
$161,178,000 |
Phase 3 Central Plant |
Central Lithium Extraction Plant, Train 3 Carbonate Plant and
Ancillary Infrastructure |
$49,812,000 |
$34,038,000 |
$20,963,000 |
$104,813,000 |
TOTAL |
|
$204,126,000 |
$145,603,000 |
$87,433,000 |
$437,162,000 |
Operating CostsThe operating
cost estimate included both direct costs and indirect costs, as
well as sustaining capital and allowances for mine closure.
The majority of the operating cost is based on reagent usage
required to extract the lithium from the tailbrine, as well as
conversion to lithium carbonate. Out of this, the greatest
amount is related to acid and base consumption (hydrochloric acid
and caustic soda), and was estimated using information from the
mini-pilot studies completed to date; it should be noted that
optimisation of reagent usage during the mini-pilot studies was not
conducted, and hence, it can be reasonably assumed that future
reagent consumption can be optimised. As such, the estimates
provided are considered to be at the upper end of likely future
costs. One of the key assessments that will be made during
operation of the demonstration plant will be studying reagent
optimisation and acid/base recovery.
Resource AssessmentThe resource
present in the Smackover Formation below the Lanxess property was
reclassified based on completion of additional brine
sampling/geochemistry and advances in the lithium recovery process
development work. Using a cut-off criteria of 100 mg/L, the
Lanxess lithium brine resource estimate is classified as
‘Indicated’ according to the CIM definition standards. The
total Indicated Lanxess lithium brine resource is estimated at
590,000 tonnes of elemental lithium, or 3,140,000 tonnes LCE; see
below for more detail.
South Arkansas Lithium Brine Project
Indicated Resource Statement
Parameter |
South Unit |
Central Unit |
West Unit |
Total |
Aquifer Volume (km3) |
5.83 |
8.29 |
16.31 |
30.43 |
Brine Volume (km3) |
0.689 |
0.995 |
1.84 |
3.52 |
Average Li concentrationMilligrams per litre (mg/L) |
168 mg/L |
Average Porosity |
11.8 % |
12.0 % |
11.2 % |
11.6 % |
Total Li resource (as metal) metric tonnes(see notes [4] & [5]
below) |
116,000 |
167,000 |
308,000 |
590,000 |
Total LCE resource(metric
tonnes)(see notes [4] & [5] below) |
615,000 |
889,000 |
1,639,000 |
3,140,000 |
Notes:[1]
Mineral resources are not mineral reserves and do not have
demonstrated economic viability. There is no guarantee that
all or any part of the mineral resource will be converted into a
mineral reserve.[2] Numbers may not add up due
to rounding.[3] The resource estimate was
completed and reported using a cut-off of 100 mg/L
lithium.[4] The resource estimate was developed and
classified in accordance with guidelines established by the
Canadian Institute of Mining and Metallurgy. The associated
Technical Report was completed in accordance with the Canadian
Securities Administration’s National Instrument 43-101 and all
associated documents and amendments. As per these guidelines,
the resource was estimated in terms of metallic (or elemental)
lithium. The Qualified Person for the Mineral Resource
estimate is Roy Eccles, P. Geol.[5] In order to
describe the resource in terms of ‘industry standard’ lithium
carbonate equivalent, a conversion factor of 5.323 was used to
convert elemental lithium to LCE.
Lithium Pricing and ProductionA
detailed future pricing study for lithium chemicals was not
completed for this PEA. The average price used for future
sales of battery-quality lithium carbonate was developed by
calculating the three-year rolling average from USGS-compiled sales
figures. This future average sales price of US$13,550/tonne
is consistent with those used for publicly-released economic
assessments of other lithium brine projects in the previous 12
months. Future selling prices ranging between US$10,840 to
US$16,260/tonne were modelled as part of a sensitivity analysis
exercise.
The total production of 20,900 tpa lithium
carbonate is based on recovery of lithium from the tail-brine
stream already being produced at the three operational brine
processing facilities in southern Arkansas. It does not take
into account possible future increases in pumping volumes at the
plants; possible optimisation by using selected brine supply wells
to increase lithium concentrations in the tail-brine stream; nor
possible expansion to include brine streams from other brine leases
that the Company has access to in the region (e.g. the Company’s
Tetra lithium-brine property).
ProcessingThe PEA is based on a
flowsheet that contemplates use of the lithium extraction
technology that has been tested by the Company through independent
bench-scale and mini-pilot stage testing, and will be tested
further in the Company’s Demonstration plant, scheduled for
delivery to the South Plant location in Q3 of 2019. The
conversion of the resulting lithium chloride solution to a final
battery quality lithium carbonate product is based on existing
technology as used commercially at several facilities.
Quality AssuranceThe PEA was
completed by Worley, with Stanislaw Kotowski P.Eng. as the lead
author. Roy Eccles P. Geol. of APEX Geoscience Ltd. was the
QP responsible for the reclassified mineral resource
estimate. Stanislaw Kotowski P.Eng., is a qualified person as
defined by NI 43-101, and has supervised and approved the
preparation of the scientific and technical information that forms
the basis for this news release. Mr. Kotowski is independent
of the Company. A National Instrument 43-101 report is
required to be filed, in conjunction with the disclosure of the PEA
in this news release, within 45 days.
About Standard Lithium
Ltd.Standard Lithium (TSXV: SLL) is a specialty chemical
company focused on unlocking the value of existing large-scale US
based lithium-brine resources. The Company believes new
lithium production can be brought on stream rapidly by minimizing
project risks at selection stage (resource, political, geographic,
regulatory and permitting), and by leveraging advances in lithium
extraction technologies and processes. The Company’s flagship
project is located in southern Arkansas, where it is engaged in the
testing and proving of the commercial viability of lithium
extraction from over 150,000 acres of permitted brine operations
utilizing the Company’s proprietary selective extraction
technology. The Company is also pursuing the resource
development of over 30,000 acres of separate brine leases located
in southwestern Arkansas and approximately 45,000 acres of mineral
leases located in the Mojave Desert in San Bernardino County,
California.
Standard Lithium is listed on the TSX Venture
Exchange under the trading symbol “SLL”; quoted on the OTC - Nasdaq
Intl Designation under the symbol “STLHF”; and on the Frankfurt
Stock Exchange under the symbol “S5L”. Please visit the
Company’s website at www.standardlithium.com.
Contact Information:LHA Investor Relations, Mary
Magnani, (415) 433-3777
On behalf of the Board,
Standard Lithium Ltd.Robert Mintak, CEO &
Director
Neither 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. This news release may contain
certain “Forward-Looking Statements” within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities laws. When used in this news
release, the words “anticipate”, “believe”, “estimate”, “expect”,
“target, “plan”, “forecast”, “may”, “schedule” and other similar
words or expressions identify forward-looking statements or
information. These forward-looking statements or information
may relate to future prices of commodities, accuracy of mineral or
resource exploration activity, reserves or resources, regulatory or
government requirements or approvals, the reliability of third
party information, continued access to mineral properties or
infrastructure, fluctuations in the market for lithium and its
derivatives, changes in exploration costs and government regulation
in Canada and the United States, and other factors or
information. Such statements represent the Company’s current
views with respect to future events and are necessarily based upon
a number of assumptions and estimates that, while considered
reasonable by the Company, are inherently subject to significant
business, economic, competitive, political and social risks,
contingencies and uncertainties. Many factors, both known and
unknown, could cause results, performance or achievements to be
materially different from the results, performance or achievements
that are or may be expressed or implied by such forward-looking
statements. The Company does not intend, and does not assume
any obligation, to update these forward-looking statements or
information to reflect changes in assumptions or changes in
circumstances or any other events affections such statements and
information other than as required by applicable laws, rules and
regulations.
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