Lithium Americas Corp. (TSE:LAC)(OTCQX:LHMAF) Monday announced the results of an NI 43-101 compliant definitive feasibility study for its Cauchari-Olaroz lithium and potash brine project in Argentina.
The property has proven and probable reserves sufficient to operate
at a production rate of up to 40,000 tonnes per annum (TPA) of lithium
carbonate for 40 years, the company said, and up to 80,000 TPA of
potash, which would include an initial five year ramp-up period.
said the low operating cost and large brine reserves of the project
compare "very favourably" to existing lithium carbonate producers, and
suggest that the company has the potential to become one of the largest
and lowest cost lithium operations in the world.
The company's plan is to build the project in two stages, with each
stage consisting of a 20,000 TPA lithium carbonate facility and a 40,000
TPA potash facility.
"Completion of the feasibility study is a significant milestone for the development of our Cauchari-Olaroz project," Lithium Americas' president and CEO Waldo Perez said.
"We have now confirmed that our battery grade lithium carbonate
operating costs will be one of the lowest in the industry, that our
reserve estimate is large enough to allow us having an extremely long
project life, and that our project is projected to generate robust
"This is the result of 3 years of hard work that has allowed us to
identify a world class project in an industry with significant expected
demand growth over the foreseeable future."
The study was prepared by the independent engineering firm ARA
WorleyParsons, the hydrogeologic modelling experts AquaResource, a
division of Matrix Solutions, and by hydrogeology expert Groundwater
Highlights of the base case feasibility study include a pre-tax net
present value, at an 8 per cent discount rate, of US$738 million and a
pre-tax internal rate of return of 23 per cent.
Net cash operating costs per tonne of lithium carbonate are seen at
US$1,332. Overall project revenue is projected at US$6.6 billion and
project EBITDA is pegged at US$4.3 billion.
Initial capital expenditure (capex) for lithium is seen at US$269
million, while initial capex for potash is anticipated at US$45 million.
Revenue generation for the project is due to start in 2015, Lithium Americas said.
Cauchari-Olaroz project is the third largest lithium brine resource in
the world according to available public records of resources and
An updated reserve and resource summary gave a measured resource of
576,000 tonnes lithium, 3.04 million tonnes lithium carbonate and 9.14 x
10(8) cubic metres of brine. The indicated resource was 1.65 million
tonnes lithium, 8.7 million tonnes lithium carbonate and 2.89 x 10(9)
cubic metres of brine.
Meanwhile, the potassium reserve and resource summary gave a measured
resource of 4.7 million tonnes, 9 million tonnes of potash and 9.14 x
10(8) cubic metres of brine. The indicated resource was 13.8 million
tonnes potassium, 26.3 million tonnes potash and 2.89 x 10(9) cubic
metres of brine.
Potash will be produced as a by-product of lithium brine processing,
with both lithium carbonate and potash to be produced in two steps.
The first step utilizes a solar evaporation process to concentrate
lithium in the brine and precipitate potash and other salts in
The solar evaporation process significantly reduces operating costs
with respect to hard rock mining, and takes only 180 days on average in
the Cauchari salar, the company said.
The second step utilizes the processing facilities, which transform
the concentrated lithium brine into lithium carbonate, and separate the
potash from the other salts.
Potash concentrates in the ponds will be seen in volumes large enough
to be harvested after two years of the production of lithium, hence the
potash plant construction is delayed with respect to the lithium
Once the ramp-up stage is complete, lithium carbonate is expected to
represent around 88 per cent of the project's total revenue, while
potash is expected to represent around 12 per cent of the project's
Of the 40,000 TPA potash production for stage 1, the company is
expecting to sell 10,000 TPA domestically within Argentina, and export
the remaining 30,000 TPA to Brazil.
Total cash operating costs are seen at US$1,876 per tonne of lithium carbonate and US$249 per tonne of potash.
The company said the second development stage is not expected to
start until 2018, and will be the subject of a separate study, which is
anticipated to "improve the already robust project financials for stage
No estimated financial results associated with stage two were included in the feasibility study results released Monday.
said the next steps for the project include detailed engineering, the
receipt of final environmental permits and the negotiation of project
financing and agreements with strategic partners.
Further information on the company and the Cauchari-Olaroz lithium and potash brine project can be found at: http://www.lithiumamericas.com/