Lepidico Ltd. advised that it has received the control estimates and schedules for both the Abu Dhabi chemical plant and the Karibib concentrator. These represent the final Phase 1 Project data required to complete lender technical due diligence, which is on the Project finance critical path, as environmental and social due diligence was completed earlier this year. The capital cost estimate including contingency for the chemical plant is USD 203 Million (million) and for the concentrator USD 63 Million for a combined USD 266 Million.

Phase 1 is based on an integrated mine, concentrator and chemical plant development that collectively has compelling investment fundamentals. The Base Case unlevered NPV8% for the Project has increased from USD 221 Million in the May 2020 Definitive Feasibility Study (DFS) to USD 530 Million (AUD 791 Million), a rise of 140%. Importantly, the Internal Rate of Return (IRR) has also increased from 31% in the DFS to 42%.

Higher forecast lithium hydroxide prices ­ based on the Benchmark Mineral Intelligence (BMI) latest data ­ have more than offset the impacts of inflation and scope changes that reduce operating risk and improve maintainability. Chemical plant capacity is unchanged at 56,700tpa (dry basis) of lithium mica/amblygonite concentrate for production capacity of 5,600tpa of lithium hydroxide. Concentrate feed grade is predicted to range from 2.5% to 3.9% Li2O over the project life and average of 2.7%, giving average annual lithium hydroxide output of 4,350/t. The significant excess process capacity in the impurity removal and lithium recovery circuits in particular provides opportunity for optimisation and higher output once in production.

The relatively modest size of Phase 1 for a lithium chemical manufacturer along with its high level of installed capacity are important risk mitigants, as development and operating risks tend to increase exponentially with scale. The overall lithium recovery to lithium hydroxide from concentrate is estimated at 89% versus 90% in the DFS. Phase 1 chemical plant by-products include caesium, rubidium, amorphous silica, sulfate of potash (SOP), and a gypsum rich residue, with no solid process waste.

Phase 1 Mineral Resources for the redevelopment of the Rubicon and Helikon 1 deposits remain unchanged from those used in the DFS, however, new Ore Reserves have been estimated with all inputs reviewed and revised. Again, the higher lithium price used of USD 17,015/t (BMI March 2022 long-term estimate) more than offset the higher operating costs, resulting in Ore tonnes increasing to 8.27M t grading 0.4% Li2O and the life of mine strip ratio falling to 2.9 to 1 (from 3.8 to 1), for an operating life of 15 years. Development work to upgrad Mineral Resources has recently been completed for Helikon 4 and stockpile material with inaugural Ore Reserve estimates due shortly that should extend mine life towards 20 years, further enhancing Project economics.