Australian-listed company Lepidico has conducted a comprehensive reassessment of its Phase 1 project, which includes a mine in Namibia and a chemical conversion plant in Abu Dhabi.
This review aimed to align the project with current lithium price projections and incorporate new ore reserves.
The Phase 1 investment remains financially robust, with an after-tax net present value (NPV) of $457 million, utilizing an 8% discount rate, for the integrated project.
The pre-tax NPV stands at $522 million, with 32% attributed to the Karibib operation in Namibia and 68% to the Abu Dhabi chemical conversion operation.
The capital cost estimates remain steady at $266 million, and the project maintains a payback period of less than three years.
One significant change since the May 2020 definitive feasibility study is linked to the evolving lithium price forecast, which has seen notable fluctuations over the past five years.
The inclusion of the Helikon 4 satellite openpit and Rubicon ore reserves has extended the project’s operational life by four years, now totaling 19 years, thanks to the higher grade material with 0.62% lithium oxide.
Furthermore, the integrated Phase 1 project is positioned in the second quartile of the global all-in sustaining costs (AISC) curve for 2030, taking into account by-product credits.
The life-of-mine AISC averages $8,730 per metric ton of lithium carbonate equivalent (LCE) or $7,680 per metric ton of lithium hydroxide, with C1 costs estimated at $5,890 per metric ton of LCE or $5,185 per metric ton of lithium hydroxide after considering by-product credits.
Notably, the chemical plant by-products include caesium, rubidium, amorphous silica, sulphate of potash, and a gypsum-rich residue, with zero solid process waste.
The BMI 2023 cost curve indicates that the marginal cost of production exceeds $35,000 per metric ton of LCE.
However, given prevailing prices of $20,000 to $25,000 per metric ton, some high-cost lithium production has been scaled back.
The marginal cost of production in 2030 is projected to be around $30,000 per metric ton of LCE, offering a strong foundation for the long-term price forecast of $28,980 per metric ton of LCE real (or $30,980 per metric ton of lithium hydroxide).
Lepidico is actively working with advisors to structure funding and secure conditional finance commitments in the current quarter.
The financing strategy centers on core funding from the public sector for the Karibib mine-concentrator and the Abu Dhabi chemical plant, although these processes have taken longer than initially anticipated.
