Piedmont Lithium: Scoping Study Delivers Outstanding Results
(firmenpresse) - Piedmont Lithium: Scoping Study Delivers Outstanding Results
Piedmont Lithium Limited (Piedmont or Company) is pleased to report the results of the Companys Scoping Study for its vertically-integrated Piedmont Lithium Project (Project) located within the Carolina Tin-Spodumene Belt in North Carolina, USA (TSB). The Project includes a lithium hydroxide chemical plant (Chemical Plant) supplied with spodumene concentrate from an open pit mine and concentrator (Mine/Concentrator).
The Project has compelling projected economics due to low initial capital, early spodumene concentrate sales, attractive capital and operating costs, short transportation distances, minimal royalties and low corporate income taxes. The Project meets an important strategic need for domestic US lithium production and will confer substantial economic benefits on the local region.
Scoping Study Parameters - Cautionary Statements
The Scoping Study referred to in this announcement has been
undertaken to determine the potential viability of an open
pit mine, spodumene concentrator and lithium hydroxide
plant constructed in North Carolina, USA and to reach a
decision to proceed with more definitive studies. The
Scoping Study has been prepared to an accuracy level of
±35%. The results should not be considered a profit
forecast or production forecast.
The Scoping Study is a preliminary technical and economic
study of the potential viability of the
vertically-integrated Piedmont Lithium Project. In
accordance with the ASX Listing Rules, the Company advises
it is based on low-level technical and economic
assessments that are not sufficient to support the
estimation of
Ore Reserves. Further evaluation work including infill
drilling and appropriate studies
are
required before Piedmont will be able to estimate any Ore
Reserves
or to provide any assurance of an economic development
case.
Approximately 55% of the total production target is in the
Indicated
Mineral Resource category with 45% in the Inferred Mineral
Resource
category. 100% of the production target in years 1-2 and 70
% of the production target in years 3-6 are in the
Indicated
Mineral Resource category. The Company has concluded that
it has reasonable grounds for disclosing a production
target which includes an amount of Inferred material.
However, there is a low level of geological confidence
associated with Inferred
Mineral Resources and there is no certainty that further
exploration work (including infill drilling) on the
Piedmont deposit will result in the determination of
additional Indicated
Mineral Resources or that the production target itself will
be realised.
The Scoping Study is based on the material assumptions
outlined elsewhere in this announcement. These include
assumptions about the availability of funding. While
Piedmont considers all the material assumptions to be
based on reasonable grounds, there is no certainty that
they will prove to be correct or that the range of
outcomes indicated by the Scoping Study will be achieved.
To achieve the range outcomes indicated in the Scoping
Study, additional funding will likely be required.
Investors should note that there is no certainty that
Piedmont will be able to raise funding when needed. It is
also possible that such funding may only be available on
terms that dilute or otherwise affect the value of the
Piedmonts existing shares. It is also possible that
Piedmont could pursue other value realisation strategies
such as sale, partial sale, or joint venture of the
Project. If it does, this could materially reduce
Piedmonts proportionate ownership of the Project.
The Company has concluded it has a reasonable basis for
providing the
forward-looking statements included in this announcement
and believes that it has a reasonable basis to expect it
will be able to fund the development of the Project. Given
the uncertainties involved, investors should not make any
investment decisions based solely on the results of the
Scoping
Study.
EXECUTIVE SUMMARY
Piedmont is pleased to report the results of the Scoping Study for its vertically integrated lithium hydroxide chemical project located in the Carolina Tin-Spodumene Belt in North Carolina, USA. The Scoping Study includes a 22,700 tonne per year Chemical Plant supported by a Mine/Concentrator producing 170,000 tonnes per year of 6% Li2O low-iron spodumene concentrate.
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- Integrated project to produce 22,700 tonnes per year of lithium hydroxide
- Initial 13-year mine life with 2 years of concentrate sales and 11 years of integrated operation
- Staged development to minimise up-front capital requirements and equity dilution
- Stage 1 initial capex of US$91mm for the Mine/Concentrator (excluding contingency)
- Stage 2 capex for Chemical Plant funded largely by internal cash flow
- Estimated 1st quartile lithium hydroxide operating costs of US$3,960/t
- Conventional technology selection in all project aspects
- Steady state EBITDA of US$220mm annually with steady-state after-tax cash flow of US$170-180mm
- Estimated after-tax IRR of 56% and NPV8% of US$777mm, with ~2-year payback
- Upside opportunities include project life extension and by-product monetisation
The Scoping Study contemplates a staged development approach to minimise start-up risk and up-front capital requirements, with revenue from open-market spodumene concentrate sales in the Projects initial years helping defray capital requirements for the Chemical Plant.
The Scoping Study demonstrates the compelling economics of the prospective integrated Project, highlighted by low operating costs, high after-tax margins and strong free cash flow.
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First-Quartile Operating Costs
The integrated Piedmont project is projected to have an average life of project cash operating cost of approximately US$3,960 per tonne, positioning Piedmont as the industrys lowest-cost producer as reflected in the 2018 lithium hydroxide cost curve provided by Roskill in Figure 1.
http://www.irw-press.at/prcom/images/messages/2018/44072/180719 - Scoping Study Press Release_FINALPRcom.003.png
Figure 1 - Lithium hydroxide 2018 cost curve (Source - Roskill)
Attractive After-Tax Margins and Free Cash Flow
Low operating costs, low royalties, and low corporate tax rates potentially allow Piedmont to achieve after-tax margins approaching US$8,900 per tonne, or approximately 64%. The Project generates an estimated US$8,650 per tonne of free cash flow during life-of-mine operations after construction of the Chemical Plant.
http://www.irw-press.at/prcom/images/messages/2018/44072/180719 - Scoping Study Press Release_FINALPRcom.004.png
Figure 2 - After tax free cash flow on lithium hydroxide sales during life-of-mine operations
Staged Development Approach Minimises Equity Dilution
The Scoping Study contemplates a staged development approach to minimise start-up risk and up-front capital requirements, with revenue from open-market sales of spodumene concentrate in the Projects initial years helping defray capital requirements for the Chemical Plant. After-tax free cash flow of approximately US$128 million is expected to be generated prior to the construction of the Chemical Plant, and an additional US$108 million of operating cash flow from concentrate sales is expected to be generated during the Chemical Plants ramp-up.
The establishment of positive cash flow from spodumene concentrate sales will position Piedmont to attract financing on terms not available to greenfield developments, including access to the US corporate bond market. This is expected to lead to lower costs of capital when financing the Chemical Plant, and to allow Piedmont to minimise equity dilution to the Companys shareholders.
Conclusions and Next Steps
The Scoping Study demonstrates the integrated Projects strong commercial potential, centred on very low operating and capital costs, and the staged development puts Piedmont in a strong position to engage in discussions around future financing of the Project, including with prospective strategic and off-take partners.
Piedmont will now move forward with a Pre-Feasibility Study (PFS) targeted for completion early in 2019. The Company will undertake the following work in developing the PFS:
- A previously announced By-product Study to examine the potential to enhance Project economics through the recovery and monetisation of by-product quartz, feldspar and mica
- Additional drilling on the Core property to potentially extend mine and project life by converting the previously announced current Exploration Target into a Mineral Resource
- Metallurgical studies including the evaluation of the potential for a Dense Medium Separation (DMS) before the flotation circuit to further enhance operating costs in the Concentrator
- Continued expansion of the Companys land position in the TSB with a focus on areas of high mineral prospectivity
Keith D. Phillips, President and Chief Executive Officer, said, We are very pleased with the results of the Scoping Study. The economic benefit of developing an integrated lithium chemical business in North Carolina, USA is now clear, driven by the exceptional infrastructure and human resource advantages of our location, as well as the competitive royalty and tax regime offered in the United States. We look forward to an exciting period ahead as we work to enhance the Project even further through continued growth in our resource base and project life, and the evaluation of potential by-product credits.
For further information, contact:
Keith D. Phillips
President & CEO
T: +1 973 809 0505
E: kphillips(at)piedmontlithium.com
Anastasios (Taso) Arima
Executive Director
T: +1 347 899 1522
E: tarima(at)piedmontlithium.com
Forward Looking Statements
This announcement may include forward-looking statements. These forward-looking statements are based on Piedmonts expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Piedmont, which could cause actual results to differ materially from such statements. Piedmont makes no undertaking to subsequently update or revise the forward-looking statements made in this announcement, to reflect the circumstances or events after the date of that announcement.
To view entire news in English, please follow the link:
https://www.asx.com.au/asxpdf/20180719/pdf/43wmhshh778fn7.pdf
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Datum: 19.07.2018 - 15:38 Uhr
Sprache: Deutsch
News-ID 578491
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