- Large-scale lithium project in Northern Nevada. PFS demonstrates production of 60,000 tpa of battery-grade lithium carbonate (Li2CO3) to be developed in two phases.
- 46-year mine life from low strip open-pit mine. Open-pit mine plan with proven and probable reserves of 3.1 million tonnes of lithium carbonate equivalent (LCE) at a grade of 3,283 ppm Li supporting a mine life of 46 years and a low strip ratio of 1.6:1 waste-to-ore.
- Collaborated with Ganfeng Lithium to develop and test process flowsheet. Flowsheet developed and tested with support from Ganfeng Lithium’s technical team and facilities to produce Li2CO3 from lithium-bearing claystone at an average recovery rate of 83% using conventional sulfuric acid leaching.
- Positioned at low end of the cost curve. Average life of mine (LOM) operating costs of $2,570/t of Li2CO3, net credits from sulfuric acid and electricity sales. Average LOM all-in sustaining costs, including royalties and sustaining capital costs, of $3,043/t of Li2CO3.
- Phase 1 capex of $581 million. Initial capital cost, including a 19% contingency, estimated at $581 million for Phase 1, and $478 million for Phase 2. At a price of $12,000/t for battery-grade Li2CO3, cashflow from Phase 1 production is forecast to fully-fund Phase 2 capital costs.
- After-tax IRR of 29.3% at $12,000/t Li2CO3. Average annual EBITDA of $520 million ($246 million – Phase 1), after-tax NPV of $2.6 billion (at an 8% discount rate) and after-tax IRR of 29.3% assuming a price of $12,000/t for battery-grade Li2CO3.
|Lithium carbonate price||$12,000/t Li2CO3|
|Mining method||Continuous open-pit mining|
|Annual production capacity||60,000 tpa Li2CO3 (Phase 1 – 30,000 tpa)|
|Mineral reserves||3.1 million tonnes of LCE at 3,283 ppm Li|
|Mine life||46 years|
|Strip ratio (waste-to-ore mined)
Pit depth (max)
|Initial capital costs||$1,059 million (Phase 1 – $581 million)|
|Operating costs (average LOM)||$2,570/t Li2CO3 ($4,088/t before by-product credits)|
|EBITDA (average annual)||$520 million (Phase 1 – $246 million)|
|NPV (8% discount, pre-tax)||$3.9 billion|
|NPV (8% discount, after-tax)||$2.6 billion|
The PFS contemplates initial Phase 1 production capacity of 30,000 tpa of battery-grade Li2CO3 commencing in 2022 and increasing in Phase 2 to 60,000 tpa in 2026. The Project will be developed as an open-pit mining operation using conventional continuous mining equipment. Given the soft nature of the deposit, minimal blasting and crushing is anticipated. The ore will then be processed in a leaching circuit using sulfuric acid to liberate the lithium from the claystone. Following the leaching process, the lithium bearing solution will be purified using crystallizers and reagents to produce battery-grade Li2CO3.
With the reliance on sulfuric acid, the Project will involve the construction of a 5,280 tonnes per day (“tpd”) (2,640 tpd – Phase 1) conventional sulfuric acid plant at site. The sulfuric acid plant will convert molten sulfur into low-cost sulfuric acid reducing transportation costs and providing a low-cost source of power. Excess acid will be sold locally to large consumers in the region. In addition, the sulfuric acid plant contemplates a co-generation facility, providing enough carbon-free electricity to power the entire Project with excess power being sold to the grid.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/f9694a83-dba3-4745-8570-209dda53f46e
The mining operation for the Project is planned as a simple and low-cost open-pit mine using a small fleet of surface miners. Given the soft nature of the claystone, minimal blasting is anticipated and will be limited to areas in the deposit with basalt formations. The mine plan includes excavating highest-grade and lowest strip ore in the early years of production; however, ore grades do not fluctuate substantially throughout the life of mine (“LOM”). The ore body begins at or near surface, with the maximum depth of the pit reaching 120 m. The average ore mining rate is 7,296 tpd for Phase 1 and 13,062 tpd for Phase 2.
The mine plan contemplates mining of 509.8 million tonnes of material consisting of 330.4 million tonnes of waste rock and 179.4 million tonnes of ore (delivered to plant) over a 46-year mine life. The average strip ratio for the Project is 1.6:1 waste-to-ore mined with an average strip ratio of 1.5:1 during the first four years of the mine plan. In-pit waste backfill will total 285 million tonnes, with only 2.2 million tonnes being transferred by truck to a nearby waste rock dump. Waste rock is also used as fill for project infrastructure. The average grade of the ore is 3,283 ppm Li.
|Proven and Probable||179,422||3,283||589||3,135|
1. Mineral Reserves are defined at the point where the ore is delivered to the processing plant. Reductions attributed to plant losses have not been included.
2. Mineral Reserves are presented at a 2,500 ppm Li cut-off grade.
3. The conversion factor for lithium metal (100%) to LCE is 5.323.
4. Applied density for the ore is 1.79.
Collaboration with Ganfeng Lithium
Metallurgical testwork for the PFS was carried out at production facilities owned and operated by Jiangxi Ganfeng Lithium Co.,Ltd. (“Ganfeng Lithium”) in Jiangxi Province, China. The process testwork benefited from a close collaboration between Ganfeng Lithium and Lithium Americas’ respective technical teams.
Lithium Americas provided four statistically representative composites of ore from the deposit that characterize the different grades of ore exposed by drilling in the proposed pit area. These samples were based on the mass weighted average of the deposit and were assembled from different depths and locations to ensure a representative testing campaign.
The initial process flow sheet concept was developed by Lithium Americas. The test program was developed with Ganfeng Lithium’s engineering and technical teams. Much of the process test work was carried out by Ganfeng Lithium and complimented Lithium Americas test work on ore preparation, tailings handling and storage design. Results from this testing were incorporated to the process flow sheet using the industry-standard Aspen chemical process model. A final bench-scale confirmation test was completed at Ganfeng Lithium’s facilities. The process engineering and design for the process plants and infrastructure were based on the results of the test work, as well as Aspen process model results.
The production process is designed to use conventional and commonly-available equipment, arranged to take advantage of the distinctive qualities of the high-grade ore. The process comprises a series of steps to concentrate, separate and produce battery-grade Li2CO3.
First, ore from the mine will be crushed, screened and then transferred as a slurry to the leaching circuit where sulfuric acid will be added to attack the ore and liberate the lithium from the clay. The high-grade quality of the ore allows for leaching to occur in stirred reactors (vats), specifically designed to maximize speed and efficiency of lithium dissolution, while minimizing sulfuric acid consumption. Total leaching time is estimated at three hours.
The resulting lithium-bearing solution will then go through a pH-neutralization step. Neutralization will be achieved with ground limestone during start-up and sustained with recycled alkaline solids from an upstream precipitation process during normal operation. Next, the lithium solution will undergo a crystallization step using steam and electricity from the sulfuric acid production process. Water is removed for recycling, and magnesium sulfate (Epsom salt) is produced. Any magnesium remaining in solution is removed in a second step that involves the addition of reagents to precipitate magnesium hydroxide.
Finally, soda ash will be added to the lithium bearing solution to produce a high-quality, battery-grade Li2CO3. Much of the water contained in the lithium solution will be recovered and returned to the process. The total time projected to manufacture battery-grade Li2CO3 from the ore is less than 24 hours. The overall recovery of lithium from the ore is 83%.
Waste from the process will be separated into three distinct streams: clay tailings, magnesium sulfate and sodium/potassium sulfate. Separation of these streams allows for potential future processing and sale of these salts. Tailings and salt storage facilities are located adjacent to the plant.
A diagram illustrating the process flowsheet is shown in Figure 2.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/a541e8a5-443c-49d4-b206-8323fc9da379
Sulfuric Acid Plant
The price of sulfuric acid is a major factor in the economics demonstrated by the PFS. The price of sulfuric acid has fluctuated from a low of $30/t to a high of $200/t over the past 15 years. The on-site production of sulfuric acid will create value for the Project in three ways, by: (i) reducing transportation costs – one part molten sulfur will make three parts sulfuric acid; (ii) producing steam and electricity; and (iii) generating revenue through sale of excess acid and electricity to the market.
Supplies of molten sulfur, the feedstock for a sulfur-burning sulfuric acid plant, are available as a reliable by-product from numerous chemical processing locations throughout the western USA. In 2017, approximately 9 million tonnes of sulfur were produced in the USA with 46% produced in the Rocky Mountain and West Coast regions. The main benchmark price in the molten sulfur domestic market, the Tampa quarterly price, has remained relatively stable since 2016 and is expected to remain $66 – $97/t (delivered) through 2023.
Modern acid plants represent a clean technology and have been recently permitted throughout the United States. Soda ash, already available in large quantity at the plant site for Li2CO3 production, will be used in a tail gas scrubber arrangement to reduce sulfur dioxide emissions well below the US EPA Prevention of Significant Deterioration (“PSD”) limit of 90 tpa.
Thacker Pass Phased Expansion
The Thacker Pass PFS entails the design of a production facility reaching a capacity of 60,000 tpa Li2CO3, through two 30,000 tpa Li2CO3 construction phases. The production capacity was selected based on anticipated market demand. Although not contemplated in the PFS, Phase 2 may be re-designed to increase production capacity, based on market conditions.
Phase 1 construction is targeted to commence in 2020 with lithium production beginning in 2022. Reagent and product transport in Phase 1 is serviced entirely by trucks via the existing paved State highway network adjacent to the plant.
Phase 2 construction is projected to start in 2025, with added production entering the market by 2026. Capital costs for Phase 2 are estimated at $478 million. Additional infrastructure in Phase 2 includes (i) doubling the sulfuric acid capacity by building a second acid plant, (ii) increasing capacity in ore preparation, leaching, filtration, crystallization, and reagent storage, and (iii) construction of a rail line with service directly to the plant.
Phase 2 includes the construction of a 93 km rail line that interconnects the plant with a Union Pacific main line (“UP Line”) near Winnemucca. The proposed rail route alignment involves minimal cut-fill balancing due to near-flat topography, resulting in a low cost of construction. The rail line streamlines the transportation of reagents and products, reduces operational costs and allows for significant future plant expansions. The UP Line is connected to existing facilities producing soda ash (Wyoming), limestone (Nevada) and molten sulfur (various locations). The capital cost ($105 million) and operating cost of the rail line are included in the PFS; however, there is the potential to assign responsibility for construction and operation of the railway to a third-party rail operator.
Credits from Sulfuric Acid and Electricity Sales
The only by-products from Li2CO3 production contemplated in the PFS are excess sulfuric acid and electricity. The distribution of gross revenue between Li2CO3 and by-products are presented in Table 3.
A “captive” co-generation sulfur-burning acid plant, with an on-site turbine waste-heat electric power generating unit, would reduce sulfuric acid and electricity costs. It is estimated that the 2,640 tpd acid plant proposed for Phase I will generate 35 MW of electricity. In Phase II, a second 2,640 tpd sulfuric acid plant, supplemented with additional heat recovery equipment, would produce an estimated total electrical output of 80 MW. Depending on pricing for electricity sales and consumption needs, the Project may sell all electricity produced, or only the excess produced when the Project’s electrical power requirements are satisfied. The PFS considers selling all electricity produced by the co-generation facility at 0.0756 $/kWh and purchasing power from the grid at 0.0632 $/kWh. This carbon-free firm electricity is a premium, in-demand product that can stabilize intermittent renewable energy production.
The design capacity of the sulfuric acid plants in Phase 1 and Phase 2 facilitate the sale of excess acid, which can be sold and distributed to regional manufacturers and mining customers. The credits from electricity and excess acid sales result in a LOM production cost of sulfuric acid of $8.23/t H2SO4 (based on 100% concentration) or $262/t LCE using sulfur at $146/t (delivered) as the base case.
Average Annual Revenue
Average Annual Revenue
|Life of Mine
|Category||($ millions)||(%)||($ millions)||(%)||($ millions)||(%)|
The capital cost estimates are based on quotes for current labor and materials costs. The Phase 1 construction capital cost are estimated at $581 million inclusive of a 19% contingency. Construction and commissioning are expected to take approximately 21 months, with production expected to commence in 2022, subject to receiving final permits. At a price of $12,000/t Li2CO3, cashflow from Phase 1 is expected to fully-fund the capital costs of Phase 2. Detailed capital cost estimates are presented in Table 4.
|Lithium carbonate plant||$||218||$||96||$||314|
|Sulfuric acid plant||$||134||$||158||$||293|
|Railroad and yards||$||3||$||81||$||84|
|Total Direct Cost||$||401||$||336||$||737|
|Total Indirect Cost||$||89||$||65||$||154|
|Total Capital Costs||$||581||$||478||$||1,059|
|% of Total|
|Sulfuric acid plant||$||1,780||44.0||%|
|General and administrative||$||156||3.6||%|
|Electricity delivery (wheeling charge)||$||15||0.4||%|
|Total Operating Costs||$||4,088||100.0||%|
|Discount Rate||Low Case NPV||Base Case NPV||High Case NPV|
Community and Environment
Lithium Americas has developed a community engagement plan, recognizing that the well-being of all stakeholders is essential to the success of the Project. The Project was designed reflecting information collected during numerous stakeholder meetings, including a public open house. This approach is expected to mitigate potential concerns at the design level, and ensures the local community is included early in the development process. Future public open houses are planned as the project advances to ensure the community is fully engaged.
Economic Benefits to Nevada and USA
The Thacker Pass PFS demonstrates the Project will provide substantial economic benefits to the USA at the local, state and national levels, including:
- Direct employment of at least 800 high paying jobs during the 21-month construction period (Phase 1);
- Direct employment of at least 292 high paying permanent positions during the 46-year operation;
- Several hundred indirect jobs with suppliers of products and services to support mine operations;
- $1.7 billion capital investment on a combined basis for both Phases 1 and 2 including sustaining capital;
- Payments to the federal and state governments totaling approximately $6.7 billion in the form of corporate tax over 46 years (based on a price of $12,000/t of Li2CO3);
- Training and skills development programs aimed at maximizing local employment in Nevada; and
- Expected improvement of local and regional infrastructure.
Lithium Americas began the permitting process in Q1 2018 by commencing baseline data collection. The baseline data collection process is scheduled to be substantially complete by Q4 2018. A Mine Plan of Operations is expected to be ready for submission in Q3 2018, with the EIS to be submitted to the regulators by Q3 2019. Approvals would be issued following the regulatory review of the EIS.
Next Steps and Recommendations
The Thacker Pass PFS has assumed a development timetable as follows:
- Q2 2018 – Commence exploration drilling aimed to increase resource size northwest of the pit area and in the SW Basin (see Figure 1)
- Q3 2018 – Commence pilot testing and additional trade-off studies; advance basic engineering towards construction
- Q3 2018 – Submit Mine Plan of Operation for Phase 1
- Q3 2019 – Submit EIS for Phase 1
- Q4 2020 – Receive final permits and begin construction of Phase 1
- Q3 2022 – Commissioning and first Phase 1 production
- Q2 2025 – Federal and State approvals obtained for rail corridor and plant expansion
- Q2 2025 – Commence construction for Phase 2
- Q3 2026 – Commissioning and Phase 2 production
The Thacker Pass PFS and Lithium Americas have identified a number of areas for further consideration. These include:
- Sale of an intermediate product. To improve financing flexibility, Lithium Americas is considering the production of an intermediate product with the final processing to be completed by a separate company.
- Production of other lithium compounds (i.e. lithium hydroxide and lithium metal). Lithium Americas will consider leveraging the plant design to manufacture lithium hydroxide (LiOH). In addition, the Company will consider the production of lithium metal from Li2CO3 produced at the plant.
- Lithium-ion battery recycling facility. Lithium Americas will consider leveraging the plant design for future inclusion of a lithium ion battery recycling facility.
- Extraction of additional critical minerals (Presidential Executive Order 13817). Lithium Americas will continue to evaluate the feasibility of extracting and processing other critical minerals within the Thacker Pass deposit currently treated as waste.
- Railway partnership. Lithium Americas will evaluate the potential to engage an experienced rail industry partner to build, own and operate the proposed rail spur from the UP main line to the plant.
- Acid plant partnership. Lithium Americas will evaluate the potential for a partnership(s) in the ownership, construction and/or operation of the acid plants. This could include a joint venture partnership or a third-party build-own-operate structure.
- Solar power plant. Lithium Americas will evaluate the feasibility of generating solar electricity near the plant site to increase revenue and reduce the environmental footprint of the project.
- Louis Fourie, P.Geo., WorleyParsons, QP for mineral resources and QA/QC and data verification;
- Dan Peldiak, P.Eng., WorleyParsons, QP for the Process Design;
- Reza Ehsani, P.Eng., WorleyParsons, QP for the Infrastructure;
- John Young, SME-RM, Great Basin Environmental Services, LLC, QP for the Environmental and Society;
- Andrew Hutson, Fellow of AusIMM, Mining Plus, QP for the mine engineering aspects and Mineral Reserves;
- Ken Armstrong, P.Eng., Chemetics Inc., a Jacobs company, QP for the sulfuric acid plant;
- Don Kime, Chemetics Inc.; and
- Rob Spiering, P.Eng., Project Director, WorleyParsons, QP for Estimate and the Economic Analysis, and for all remaining disclosure.