Critical Elements and Primero Announce a Guaranteed Maximum Price for Engineering, Procurement and Construction of the Rose ...
October 23 2019 - 5:00AM
Critical Elements Lithium Corporation (the
“Corporation” or “Critical Elements”) (TSX-V: CRE)
(US OTCQX: CRECF) (FSE: F12) is pleased to announce Primero Group
(“
Primero”) has successfully completed the first
phase of its Early Contractor Involvement (“
ECI”)
agreement with the Corporation, and that Primero has provided a
Guaranteed Maximum Price (“
GMP”) for the
engineering, procurement and construction (“
EPC”)
of the Rose Lithium-Tantalum project (“
Rose” or
the “
Project”) on a lump sum turnkey basis that is
in line with the Project’s feasibility study published November 29,
2017.
Critical Elements and Primero are in discussions
to commence the second phase of the ECI agreement (ECI Phase II –
Front End Engineering Design) which will include initial detailed
engineering as well as determining fixed prices based on the GMP
for Primero to perform all of the work involved in completing the
EPC lump sum turnkey proposal. Primero is also offering the
Corporation its EPC services as a fully integrated package if the
final lump sum is within the GMP, and if technical and commercial
parameters are met during the second phase.
A summary of the ECI approach is included
below:
- ECI Phase I – Guaranteed Maximum Price (completed):
-
- Review and assimilate all of the existing design and data
- Stress test and optimize the design through reviews, specific
value engineering and trade-off studies
- Reconfirm quantities and pricing
- Initiate selected engineering deliverables to achieve nominally
25% engineering definition
- Formulate a GMP for the process plant and associated process
supporting infrastructure
- Submit a proposal and schedule to progress to the next
phase
- ECI Phase II – Front End Engineering Design
(“FEED”):
- Progress and finalize a selected set of engineering
deliverables to achieve nominally 40% engineering definition
- Advance long lead and critical equipment packages to “Ready for
Award” status
- Complete the contracting strategy and partnership for
construction
- Optimize and reduce contingency applied to the GMP in order to
formulate a Lump Sum (the “LS”) cost estimate for
the EPC of the process plant and associated process
infrastructure
- Submit a complete and firm proposal with schedule to Critical
Elements for the EPC-LS contract (the Corporation expects the lump
sum cost estimated to be in line with the feasibility study (Rose
Lithium-Tantalum project feasibility study, WSP, November 29,
2017))
- Execution of the EPC-LS
- Operation and maintenance support throughout scope of
services
“Primero is thrilled to have worked alongside
the Critical Elements team. The GMP conclusion underscores the
skills and talent the Americas team in Montréal has in cold weather
and hard rock lithium projects, coupled with the in-house expertise
in Perth, giving us another great rollout. Rose is the latest
addition to Primero’s Québec lithium portfolio. We couldn’t be more
pleased”, stated Jacques Parent, General Manager of Primero Group
Americas.
Jean-Sébastien Lavallée, Chairman & Chief
Executive Officer of Critical Elements stated, “We are very pleased
with Primero’s work and the team. We said it before and
continue to believe they are the industry-leader in engineering and
construction of spodumene plants.”
Jean-Sebastien Lavallée (OGQ #773), geologist,
shareholder, Chairman & CEO of the Corporation and a Qualified
Person under NI 43-101, has reviewed and approved the technical
content of this release.
About Critical Elements Lithium
Corporation
The Corporation recently released a financial
analysis for Critical Elements’ wholly-owned Rose Lithium Tantalum
project (Rose Lithium-Tantalum project feasibility study, WSP,
November 29, 2017), which is based on price forecasts of US
$750/tonne for chemical-grade lithium concentrate (5% Li2O), US
$1,500/tonne for technical-grade lithium concentrate (6% Li2O) and
US $130/kg for Ta2O5 in tantalite concentrate, and an exchange rate
of US $0.75/CA $. The internal rate of return (“IRR”) for the Rose
Lithium-Tantalum project is estimated at 34.9% after tax, and net
present value (“NPV”) is estimated at CA $726 million at an 8%
discount rate. The estimated payback period is 2.8 years. The
pre-tax IRR for the Rose Lithium-Tantalum Project is estimated at
48.2% and the pre-tax NPV at CA $1,257 million at an 8% discount
rate (see press release dated September 6, 2017). The financial
analysis is based on the Indicated mineral resource. An Indicated
mineral resource is that part of a mineral resource for which
quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. The life-of-mine (LOM) plan
provides for the extraction of 26.8 million tonnes of ore, 182.4
million tonnes of waste, and 11.0 million tonnes of overburden for
a total of 220.2 million tonnes of material. The average stripping
ratio is 7.2 tonnes per tonne of ore. The nominal production rate
is estimated at 4,600 tonnes per day, with 350 operating days per
year. The open pit mining schedule allows for a 17-year mine life.
The mine will produce a total of 26.8 million tonnes of ore grading
an average of 0.85% Li2O and 133 ppm Ta2O5, including dilution. The
mill will process 1.61 million tonnes of ore per year to produce an
annual average of 236,532 tonnes of technical and chemical grade
spodumene concentrate and 429 tonnes of tantalite concentrate.
About Primero Group
Primero provides engineering design,
construction and operational services to the minerals, energy and
infrastructure sectors. Primero has specialist expertise in project
implementation and delivery with a complementary service offering
comprising civil, structural, mechanical and electrical solutions.
Primero provides these services to a diverse client base, ranging
from mid-sized companies through to international mining and energy
houses.
FOR MORE INFORMATION:
Jean-Sébastien Lavallée, P.Geo.Chief Executive Officer
819-354-5146 jslavallee@cecorp.ca www.cecorp.ca
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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