TORONTO, Nov. 1, 2018 /CNW/ - Desert Lion Energy Inc.
(TSXV: DLI) (OTCQB: DSLEF) ("Desert Lion" or the
"Company") is pleased to report the results of the Company's
Preliminary Economic Assessment ("PEA") for its Namibian
Lithium project ("Project"). The PEA covers mining,
concentrate and lithium carbonate production. The PEA was prepared
by independent consultants, Hatch Ltd ("Hatch") and The MSA
Group (Pty) Ltd. ("MSA").
Highlights:
- Cash cost of lithium carbonate of US$4,080/ tonne and lepidolite (lithium)
concentrate of US$141/ tonne, in each
case including byproduct credits
- Initial direct capital costs of US$275
Million for mine, concentrator and lithium carbonate
conversion plant, including by-product circuits (including a
contingency of US$43 Million
(15%))
- Low capital intensity for lithium carbonate of $13,750/ annual tonne of production of battery
grade lithium carbonate
- US$144 Million pre-tax NPV (8%
discount rate)
- 29% pre-tax Internal Rate of Return
- Payback period of ~2.5 years
- Life of Mine Revenues of US$852
Million
- Average sales price of US$13,000
per tonne of lithium carbonate
Cautionary Note: A PEA is preliminary in nature and includes
Inferred Mineral Resources, which are considered too geologically
speculative to have economic considerations applied to them that
would enable them to be categorized as Mineral Resources. Mineral
Resources that are not Mineral Reserves do not have demonstrated
economic viability. There is no certainty that the reserves
development, production and economic forecast on which the PEA is
based will be realized.
Tim Johnston, CEO of Desert Lion
commented, "We are very pleased with the results of the Preliminary
Economic Assessment which confirm management's belief in the
benefits associated with the Project's at or near surface
mineralization, proximity to high quality existing infrastructure
and the low-cost operating environment in Namibia. The Preliminary Economic Assessment
demonstrates the compelling economics of the Project, highlighted
by low capital costs, low operating costs and high earnings."
The Preliminary Economic Assessment details the production of
lepidolite (lithium) concentrate at the mine site with final
processing of such concentrate into battery grade lithium carbonate
near the Port of Walvis Bay. The mine site is located approximately
20 km from the town of Karibib and approximately 220 km from the
major Port of Walvis Bay connected via the national highway and
state-owned railway. The vertically integrated plant encompasses
the development of a mine, concentrator and lithium carbonate plant
capable of producing 20,000 tonnes per year of battery grade
lithium carbonate. By-products include 35,250 tonnes of petalite
concentrate per year and 290 tonnes of tantalum concentrate per
year. The development plan will continue to be assessed during the
next stage of work to be completed by the Company which is planned
to include further exploration results and an assessment of the
lithium market conditions.
Vertically Integrated Lithium Carbonate Plant
- 20,000 tonnes per year of battery grade lithium carbonate from
an average of 2.35 million tonnes per year of run of mine
mineralization, using conventional processing equipment
- Capital cost of US$275MM for mine, concentrator and lithium
carbonate conversion plant, including by-product circuits,
including contingency
- Average cash cost of production US$4,080/ tonne of battery grade lithium
carbonate, net of byproducts and inclusive of royalties
- Life of Mine Revenues of US$852
Million
- US$144 Million pre-tax NPV at an
8% discount rate (US$109 Million
post-tax), assuming an average sale price of lithium carbonate of
US$13,000/ tonne
- 29% pre-tax Internal Rate of Return (25% post-tax)
- Payback period of ~2.5 years
- Future exploration potential and project life extension
provides an opportunity for further economic upside
The capital cost for the Desert Lion Lithium Project is amongst
the lowest of lithium development peers. Figure 2 shows the
relative capital intensity of the Desert Lion Vertically Integrated
project compared to peers.
Notes:
- Capital costs and planned production has been collected from
publicly available information as of 30
October 2018
- Desert Lion Energy has completed a Preliminary Economic
Assessment on its project in Namibia
- Lithium Americas has completed a Pre-Feasibility Study on
its Cauchari project in Argentina
- Each of Galaxy Resources, Nemaska, Bacanora and Lithium Americas (in
respect of its Thacker Pass project
in Nevada) have completed a
Feasibility Study in respect of their projects and
operations.
Cautionary Note: A PEA is preliminary in nature and
includes Inferred Mineral Resources. The other projects presented
in the above table are at a PFS or FS stage of development which
imparts a higher confidence in the economic and technical
feasibility of operations. Accordingly, readers should not place
undue reliance on such information.
In addition, the operating cost for the Desert Lion Lithium
Project is amongst the lowest in the world. Figure 3 shows the
relative cash operating cost net of byproducts and inclusive of
royalties for integrated or potential for integrated lithium
projects (source: Morgan Stanley).
Cautionary Note: Desert Lion Energy has completed a PEA
which is preliminary in nature and includes Inferred Mineral
Resources. The other projects presented in the above table are at
various stages of development, including PFS or FS stage of
development, which imparts a higher confidence in the economic and
technical feasibility of operations. Accordingly, readers should
not place undue reliance on such information.
Qualified Persons
The PEA was prepared by Hatch Ltd. and The MSA Group (Pty) Ltd.,
companies independent from Desert Lion. Robert Duinker, P.Eng, MBA, Marianne Utiger, P.Eng., Gary Fowler, QP. and Blaire Mackenzie, M.Eng, CPEng, P.Eng. of Hatch
Ltd. all Qualified Persons according to NI 43-101 have reviewed and
approved the technical information pertaining to the economic
estimates in this news release. In accordance with the National
Instrument 43-101 Standards of Disclosure for Mineral Projects,
which supports the MRE and PEA, the PEA Report will be filed on
SEDAR within 45 days from this date.
About Desert Lion Energy
Desert Lion Energy is an emerging lithium development company
focused on building Namibia's
first large-scale lithium mine to be located approximately 210 km
from the nation's capital of Windhoek and 220 km from the Port of Walvis
Bay. The Company's Rubicon and Helikon mines are located within a
301 km2 prospective land package, with known lithium
bearing pegmatitic mineralization. The project site is accessible
year-round by road and has access to power, water, rail, port,
airport and communication infrastructure.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking information"
within the meaning of applicable securities laws. Generally, any
statements that are not historical facts may contain
forward-looking information, and forward-looking information can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget"
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or indicates that certain actions, events or results
"may", "could", "would", "might" or "will be" taken, "occur" or "be
achieved." Forward-looking information includes but is not limited
to statements and expectations regarding: the targeted additional
deposits within the Company's mining and exploration licences; PEA
economics; the potential for the results to support an economical
project; and the Company's planned work program for the Project and
its exploration and development schedule and timetable.
Forward-looking information is based on certain factors and
assumptions management believes to be reasonable at the time
such statements are made, including but not limited to, continued
exploration activities, lithium and other metal prices, the
estimation of initial and sustaining capital requirements, the
estimation of labour and production costs, the estimation of
mineral resources, assumptions with respect to currency
fluctuations, the timing and amount of future exploration and
development expenditures, receipt of required regulatory approvals,
the availability of necessary financing for the Project, permitting
and such other assumptions and factors as set out herein.
Forward-looking information is subject to known and unknown
risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of the
Company to be materially different from those expressed or implied
by such forward-looking information, including but not limited to:
risks related to changes in lithium prices; sources and cost of
power and water for the Project; the estimation of initial capital
requirements; the lack of historical operations; the estimation of
labour and operating costs; general global markets and economic
conditions; risks associated with exploration, development and
operations of mineral deposits; the estimation of initial targeted
mineral resource tonnage and grade for the Project; risks
associated with uninsurable risks arising during the course of
exploration, development and production; risks associated with
currency fluctuations; environmental risks; competition faced in
securing experienced personnel; access to adequate infrastructure
to support exploration activities; risks associated with changes in
the mining regulatory regime governing the Company and the Project;
completion of the environmental assessment process; risks related
to regulatory and permitting delays; risks related to potential
conflicts of interest; the reliance on key personnel; financing,
capitalization and liquidity risks including the risk that the
financing necessary to fund continued exploration and development
activities at the Project may not be available on satisfactory
terms, or at all; the risk of potential dilution through the
issuance of additional common shares of the Company; the risk of
litigation.
Although the Company has attempted to identify important
factors that cause results not to be as anticipated, estimated or
intended, there can be no assurance that such forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. Forward-looking information is made
as of the date of this presentation and the Company does not
undertake to update or revise any forward-looking information this
is included herein, except in accordance with applicable securities
laws.
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that all or
any part of Mineral Resources will be converted to Mineral
Reserves.
Inferred Mineral Resources are based on limited drilling
which suggests the greatest uncertainty for a resource estimate and
that geological continuity is only implied. Additional drilling
will be required to verify geological and mineralization continuity
and there is no certainty that all of the Inferred Resources will
be converted to Measured and Indicated Resources.
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REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
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THE ADEQUACY OR ACCURACY OF THIS RELEASE
SOURCE Desert Lion Energy