Wealth Minerals Ltd. announced reaching an important milestone in its development of the Kuska project (formerly known as the Ollagüe project) at the Salar de Ollagüe, Antofagasta region, Chile. The Preliminary Economic Assessment ("PEA") has been produced by DRA Global, from the Toronto, Canada office, together with resource experts from Montgomery & Associates and other third-party consultants with pertinent qualifications. The Kuska project has been based on the maiden resource report published by Wealth Minerals Ltd. ("Resource Report") (see press release January 17, 2023). The Resource Report estimates 741,000 tons Lithium Carbonate Equivalent ("LCE") indicated resources grading 175 mg/l (plus 701,000 tons LCE inferred resources grading 185 mg/l). After the preparation of the Resource Report, the Company acquired an additional 2,500 ha of mineral concessions adjacent to the concessions covered in the Resource Report. To date, these new concessions have not been investigated for lithium. The PEA describes the Kuska project development towards a 20,000 metric tpa LCE output and an anticipated Life of Mine ("LOM") of 20 years. The Company intends to use a mature DLE technology (TRL 8 in the PEA) converting lithium-bearing brine into battery-grade Lithium Carbonate ("LC"). Wealth Minerals spent almost 1.5 years to analyze and select market-ready DLE technologies for the PEA. The final selected technology converts lithium-bearing brine into highly pure lithium chloride concentrate and a refinement step to convert the lithium-rich eluate into high purity lithium carbonate (>99.5% LC). Operations will be scaled up in two phases. The initial phase envisions building out a mining operation and plant with a capacity of 10,000 tpa LCE, which will then be scaled up to double that capacity within two years with a second production module for a total of 20,000 tpa LCE at the Kuska project. In addition, the preliminary plant concept includes process water recycling and waste treatment facilities for a minimum impact on the production area's environment. It is assumed to incorporate a maximum degree of renewable energy resource options. The mining operation consists of a well field with necessary lithium-rich brine pumping capacity and a re- injection feed system to return Li-depleted brine back into the salar. The combination of wells and depleted brine operations, together with DLE methods, enable a near-zero environmental impact on the salar to preserve salar integrity and water equilibrium to the maximum extent possible. Wealth intends to de-carbonize its lithium production operations as much as possible and has begun investigations into using renewable energy supplies that will power the production plant and associated infrastructure. Both solar and geothermal energy sources are targets of the Company's engineering team and consultants. Economic results have been derived from data available at the time of PEA calculation and are based on pre-and post-tax assumptions. Royalties and other external financial distributions have not been considered at this time, as the Chilean policy regarding these matters is evolving. The PEA estimates a pre-tax/pre-royalty NPV10 (10% discount rate) of US$1.65 bn an IRR of 33% for the project and an after-tax NPV10 of US$1.15 bn and a project IRR 28%. Base-line Capital Expenditures ("CapEx") to realize project operations have been estimated at US$749 mn, which includes total administrative, direct, indirect, and contingency cost positions expected for equipment and construction. An extra US$44 mn amount to be spent in additional exploration works and permitting has been also incorporated. Operating Expenses ("OpEx") during operations are estimated at USD 5,849/ton LC and include reagents and consumables, maintenance, labor, energy, G&A, and transportation costs.
LC product pricing underlying the PEA has been sourced from Benchmark Mineral Intelligence services' Q4-2023 conservative case real scenario price-line over the production period. Benchmark Mineral Intelligence is a leading industry consultancy and research firm dedicated to the fast-growing global lithium market. The Kuska projects' projected cash flow with the assumed base-line economic model parameters are graphically shown below (and at steady state projects total USD 330 mn/year): An initial sensitivity analysis was conducted during the PEA study with parameters such as: LCE pricing, WACC, CapEx, OpEx, and tax rate within realistic potential ranges. The analysis includes how each variable impacts key project financial performance indicators of NPV and IRR.