Rock Tech Lithium announces results from lithium hydroxide converter engineering study.
Rock Tech Lithium Inc. (TSXV: RCK) (OTCQX: RCKTF) (FWB: RJIB) (WKN: A1XF0V) (the “Company” or “Rock Tech”) announce the results of an engineering study (the “Converter Engineering Study”) for the construction and operation of the Company’s proposed high grade merchant lithium hydroxide converter and refinery facility (the “Converter”) in Guben, Germany.
Converter Engineering Study Details
The Converter Engineering Study was conducted by Wave International Pty (“Wave”) and provides an economic evaluation, including capital and operating cost estimates, of the construction and operation of the Converter.
The results of the Converter Engineering Study are based on a single plant merchant converter designed to produce up to 24,000 tonnes of high purity battery grade lithium hydroxide monohydrate (“LHM”) annually.
As announced on October 18, 2021, the Company has recently completed a pilot test program that resulted in the successful production of high purity battery grade LHM, supporting the proposed process plant design of the Converter.
As a merchant converter, a robust flowsheet has been developed to handle a range of spodumene feed sources and, as such, relevant unit processes are included in the capital and operating cost estimates.
Wave prepared the Converter Engineering Study in accordance with the requirements of a Class 4 estimate, as defined by the American Association of Cost Engineers’ Cost Estimation and Classification System.
The results of the Converter Engineering Study support the Company’s ongoing Front End Engineering Design (“FEED”) study of the Converter on a Class 2 estimate basis. The FEED study is expected to include the following activities:
- continuation of metallurgical testwork;
- finalization of process flowsheet;
- progression of discipline engineering to support improved accuracy of cost estimates;
- major procurement activities including basic engineering design for major supply packages;
- selection of major contractors and negotiation of material contract terms; and
- progression of approvals.
Key Metrics
Key metrics from the Converter Engineering Study at the assumed base case are presented below:
| Key Metrics(1)(2) | |
| Pre-Tax Net Present Value (“NPV“)(3) | €354.3 million / U.S.$429.6 million |
| After-Tax NPV(3) | €233.9 million / U.S.$284.6 million |
| Pre-Tax Internal Rate of Return (“IRR“) | 17.0% |
| After-Tax IRR | 14.5% |
| Payback Period | 64 months |
| Initial Capital Costs | €462.1 million / U.S.$560.2 million |
| Life-of-Project Capital Costs(4) | €544 million / U.S.$659.6 million |
| Life-of-Project Revenue | €6,273.4 million / U.S.$7,606.1 million |
| Life-of-Project Operating Costs | €3,261.7 million / U.S.$3,954.6 million |
| Weighted average C1 Costs per tonne LMH(5) | €6,950.4 / U.S.$8,427.0 |
| Weighted average C2 Costs per tonne LMH(6) | €8,130.8 / U.S.$9,858.1 |
| Weighted average spodumene concentrate price per tonne(7) | €473 / U.S.$573(8) |
| Weighted average lithium hydroxide (“LiOH“) price per tonne | €10,950 / U.S.$13,276(8) |
Notes:
- See “Key Assumptions and Sensitivity Analysis” section below for further details.
- Key metrics are calculated on nameplate annual production of 24,000 tonnes of LHM over 20-year life of project (as applicable).
- Discount rate of 8%.
- Includes sustaining capital.
- Includes all cash costs.
- Incudes all cash costs and depreciation.
- 5.8% Li20.
- Based on market forecasts projected over 20-year life of project.
Based on the results of the Converter Engineering Study, the Company estimates that the Converter will generate an average annual EBITDA1 of approximately U.S.$112 million between 2024 and 2043.
Highlights
- Estimated initial capital costs of approximately €462 million
- Estimated nameplate annual LMH production capacity of approximately 24,000 tonnes
- Estimated revenue of approximately €6,273 million over 20-year life of project
- Estimated After-Tax NPV (8% discount rate) of approximately €234 million
- Estimated After-Tax IRR of 14.5%
Access the full release in the link below.
Rock Tech Lithium Inc. Announces Results from Lithium Hydroxide Converter Engineering Study, VANCOUVER, BC, November 29, 2021
