Weekly Lithium Lowdown with Chris Williams – Week 49, 2023
Atlas Lithium secures US$50M funding for Minas Gerais project
Atlas Lithium has received commitment of funding from China’s Chengxin and Yahua for US$50M, it announced this week. Funds will be used to construct Phase 1 of the Minas Gerais project in Brazil. US$10M will be placed as new equity at a 10% premium to recent VWAP, while US$40M will be product prepayment.
The funding is in exchange for 80% offtake of Phase 1’s 150 ktpa spodumene concentrate output, split equally between the two parties.
The company is scoping out a modular dense media separation (DMS) concentrator design. A maiden resource and PEA is yet to be announced, although targeted for Q1 2024, while a DFS for Phases 1 & 2 (300 ktpa) is targeted for Q2 2024.
Adamas take: This funding is very encouraging for one of the fastest development stories we’ve seen. However, hand-in-hand with speed to market is pronounced design and execution risks which the company will need to tightly manage going forward.
Green Technology Metals releases PEA and obtains Mining Lease
Green Technology Metals released PEA results for the Seymour/Root project in Ontario, Canada this week. The company also announced it has received the project’s Mining Lease.
The phased development starts with Seymour’s US$212M DMS-only plant producing ~207 ktpa of 5.5% Li2O concentrate. Root’s US$350M DMS & Flotation plant would extend this production rate out for a total of 15 years.
LOM operating costs are calculated at US$938/t SC5.5. Using a weighted average price of US$2,029/t SC5.5 FOB Thunder Bay, the NPV8% comes in at US$892M.
An optional US$798M chemical plant was scoped at Thunder Bay which could produce 24,400 tpa LiOH. The plant adds an incremental NPV8% of US$238M.
The company looks to accelerate the project’s development with a DFS and possible FID planned in 2024.
Adamas take: Having to build two separate concentrators for a 15-year project weighs heavily on capital efficiency metrics. Further, operating costs are relatively high, owing to such factors as location, a 21.1 strip ratio and 1.09% Li2O average grade.
Latin Resources adds 18.3 Mt to Colina deposit MRE
Latin Resources announced this week an updated Mineral Resource estimate (MRE) for the Salinas project in Minas Gerais province, Brazil.18.3 Mt was added to the principal Colina deposit, which now sits at 63.5 Mt grading 1.3% Li2O. 41 Mt are now contained within M&I categories, up from 30 Mt.
In addition, a separate deposit known as Fog’s Block was defined at 6.8 Mt grading 0.9% Li2O. The project’s global MRE now sits at 70.28 Mt grading 1.27% Li2O.
Drilling is ongoing with 16 diamond drill rigs, as the company looks to define Mineral Reserves. DFS is targeted for completion in mid-2024.
Adamas take: The Colina deposit appears to be mostly tapped out in terms of scale. As such, resource growth is dependent on prospects along strike. To this end, an aggressive 16x rigs will be used for infill drilling prior to the DFS, while some highly prospective targets offer upside potential.
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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