Develop Global release updated Pioneer Dome Scoping Study

May. 29, 2024

Hybrid

Develop Global this month released an updated scoping study for the Pioneer Dome project in Western Australia. The study incorporates an updated mine plan which transitions the project from a large-scale open pit operation to a hybrid open pit and underground operation.

Capital expenditure was estimated at A$388.1M ($260M) for a 1.2 Mtpa DMS and flotation plant producing 200 ktpa SC5.5 for 7 years.

Operating costs came in at A$1,178/t ($789/t) SC6 on an AISC basis, FOB Esperance. Using a flat price of $1,393/t SC6 CIF China, the NPV8% was estimated at A$373M ($250M) pre-tax.

The study also assessed mine gate sale or toll treatment scenarios costing just A$35-40M. The company stated this option could work at today’s prices but would consider building the concentrator if prices rose above $1,500/t SC6.

Adamas take:

Although the new study eliminates substantial waste handling (from 117.4Mt to 8.5Mt), the hybrid mine plan has resulted in a 43% hike in costs since the February 2023 PEA.

Only a fraction of this delta can be attributed to inflation, so a win for the environment via minimized surface disturbance has resulted in a loss for the project’s economics.

As stated by the company, to build the full plant would require an incentive price of at least $1,500/t SC6. Not shown in the study are Develop’s acquisition costs of the project in 2023, which at the time was A$152.6M ($101.60M) in scrip.

At today’s Li prices, there remains little value for the project when incorporating acquisition costs and taxation.

[Extract from the May issue of the EV Battery Lithium Monthly service.]

Image: Port of Esperance 


 

Chris Williams, Analyst at Adamas Intelligence

Chris is an Analyst at Adamas Intelligence focused on the global lithium industry. He researches and analyzes the lithium value chain to uncover actionable opportunities for clients.

Chris has 11-years experience in mining and oil & gas operations optimization, delivering value from data intensive insight generation. He completed his Bachelor and Masters of Engineering at the University of Queensland, majoring in Mechanical Engineering, and is currently completing a Masters of Business Administration at the University of British Columbia.

 


 

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