PEA HIGHLIGHTS
- After tax NPV of US$934
million with an IRR of 31.6%
- PEA based on a mine life of 25 years with a 2.5 year
payback
- PEA based on a production rate of 15,600 tonnes of lithium
carbonate technical grade per year
- Processing based on simple and proven solar evaporation
technology
VANCOUVER, BC, March 4,
2024 /CNW/ -- Lithium South Development
Corporation (the "Company" or "Lithium South") (TSX-V:
LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) is pleased to announce
positive results from an independent Preliminary Economic
Assessment ("PEA") for its Hombre Muerto North Lithium Project
("HMN Lithium Project") near Salta, Argentina. The PEA was prepared by
Knight Piésold Consulting ("KP") and JDS Energy and Mining
("JDS"), both of Vancouver, in
accordance with the standards set out in National Instrument 43-101
Standards of disclosure for Mineral Projects ("NI 43-101"), and
CIM's Best Practice Guidelines for Mineral Processing
("BPGMP").
Company President and CEO, Adrian F. C.
Hobkirk is quoted, "We are very pleased that Lithium South
has advanced the HMN Lithium Project to a PEA based on 15,600
tonnes per year lithium carbonate technical grade production. The
PEA results highlight attractive economics associated with the
project, including a short payback and exceptional Internal Rate of
Return. We look forward to taking the HMN Lithium Project to the
next stage of development as quickly as possible."
Resource Estimate
The resource estimate for this PEA was prepared in accordance
with NI 43-101 and CIM Standards, and uses best practice methods
specific to brine resources, including a reliance on core drilling
and sampling methods that yield depth-specific chemistry and
effective (drainable) porosity measurements. The technical report
filed on November 6, 2023, is titled,
Updated Mineral Resource Estimate – Hombre Muerto North Project,
NI 43-101 Technical Report Catamarca and Salta, Argentina, Mark
King, Ph.D., P.Geo., Peter
Ehren, M.Sc., MAusIMM, September 5th,
2023. The report was prepared in accordance with
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects, on behalf of the Company by independent consultants
Groundwater Insight of Halifax, Nova
Scotia, Canada.
Capital costs (CAPEX) have been updated with quotations from
current suppliers working in project construction and development
in the Puna region of Argentina.
CAPEX estimates include an Indirect Cost of 16.6% of Direct Costs,
and a contingency of 30% of Total Costs.
Project Location and Environmental Permitting
The HMN Lithium Project is located at the northern portion of
the Salar del Hombre Muerto, at the boundary zone of the Catamarca
and Salta provinces, 170 km southeast of the city of Salta. The
project area comprises a collection of properties or concessions
acquired under purchase options from the existing owner. The
properties are held as "minas" (full mining licenses not subject to
further area reduction requirements) by a wholly owned Argentine
subsidiary of the Company. The HMN Lithium Project comprises six
properties distributed over the Salar for a total of 3,237
hectares. All properties are subject to a mining license
for borates. The area of the property is not subject to any
known environmental liabilities.
Lithium Pricing
A lithium price of $US20,000/tonne
(t) was assumed for the study, assuming a 2029 production start-up.
The price of lithium has been volatile in recent months, declining
from a peak of approximately US$85,000/t in November
2022 and stabilizing to US$13,000/t in 2024. The selected price was based
on current published market analysis and by benchmarking the price
assumptions found in multiple technical reports from similar brine
lithium projects. The benchmarking exercise provided a long-term
price range of between US$20,000 and
US$25,000/t, with an average of
US$22,400/t over seven projects.
The assumption of US$20,000/t is
deemed to be reasonable by the Qualified Person ("QP").
Processing
The PEA models process eco-system covers the following
units:
The brine chemistry is similar to other brines in the region,
which allows the brine to be processed using similar processing
technology as existing producers. The nominal extraction rate of
the design is 179 liters per second. After an initial
preconcentration, lime is added to the brine, which removes a large
part of magnesium as magnesium hydroxide and the sulfate as gypsum.
When the low magnesium and calcium brine is concentrated to about
0.75% it is fed to the lithium carbonate plant. Most of the noxious
impurities that are still left in the brine are removed by
selective precipitation through the addition of a solution of soda
ash and slaked lime and a final ion exchange polishing. The
impurity free brine is then sent to specially designed carbonation
precipitators. To produce technical-grade lithium carbonate, a soda
ash solution is added at high temperatures, leading to the
precipitation of solid lithium carbonate. This solid is then
subjected to a series of processes: it is filtered in a centrifuge,
washed, repulped, centrifuged once more, and finally washed
again. The lithium carbonate is dried and packaged in maxi bags, to
be finally transported to the client. The main consumption of
reagents in the process is shown in a table below.
Increased Lithium Recovery
The report has an updated lithium recovery process for the HMN
Lithium Project brine, which uses industry proven evaporation. An
adjustment in the processing sequence will reduce lithium loss as
brine entrainments in harvested salts, in the magnesium hydroxide,
and in calcium sulfate solids, obtaining a lithium recovery of
approximately 70%, an improvement from the previous recovery of
50%. Peter Ehren, M.Sc., MAusIMM, is
the QP responsible for Mineral Processing.
About Lithium South
Lithium South owns 100% of the HMN Lithium Project located in
Salta and Catamarca Provinces, Argentina, in the heart of the lithium
triangle. The Salar del Hombre Muerto has a history of lithium
production, with Livent Corporation in operation for over
twenty-five years, in an area just south of the HMN Lithium
Project. The HMN Lithium Project is surrounded by a
US$4 billion lithium development
under construction by POSCO (Korea) and the Sal de Vida Project
under development by Allkem. Exploration work to date has
delineated a National Instrument 43-101 compliant 1,583,200 tonne
Lithium Carbonate Equivalent ("LCE") Resource on the Alba Sabrina,
Natalia Maria, and Tramo claim
blocks, three of five non-contiguous blocks that make up the HMN
Lithium Project. With process work underway, Lithium South is
transitioning from being a lithium explorer to becoming a lithium
developer.
Qualified Person Statements
Peter Ehren is an independent
Lithium Consultant. He has more than two decades of experience in
the industry. He started his interest in the lithium business
during his master's thesis at Technical University of the Delft
where he investigated for BHP Minerals the recovery of lithium
from geothermal brine (Salton Sea),
applying a Direct Lithium Extraction ("DLE") technology. After his
thesis he worked for SQM as a process engineer and R&D manager
till 2007. Since 2007 he started to work as independent consultant
in the lithium, boron and potassium industry. He is a world expert
in solar evaporation systems, phase chemistry and process
developments. Additionally, his experience covers product
applications, OPEX and CAPEX estimation, process simulations,
engineering, R&D and product development. He has worked in
lithium basins and production facilities worldwide. He is a
Chartered Professional (AusIMM) and QP for NI 43-101 and JORC.
Dr. Mark King, Ph.D., F.G.C.,
P.Geo., of Groundwater Insight, Inc., is the QP for resource
estimation components of the PEA., as such term is defined by NI
43-101. Dr. King has extensive experience in salar environments and
has been a QP on numerous lithium brine projects, ranging from
early exploration to production. Dr. King is independent from the
Company and has reviewed and approved the technical information
mentioned in this press release.
Richard Goodwin, P.Eng., Project
Manager for JDS Energy and Mining, Inc., is independent of Lithium
South and a QP as defined under Canadian National Instrument
43-101. Mr. Goodwin is a mining engineer and study manager with
over 30 years of experience managing mining operation and projects
in various commodities such as base metals, precious metals, PGMs,
and diamonds in various domestic and international locations. Mr.
Goodwin is responsible for the PEA results, participated directly
in the production of this press release, and directly related
information in this press release, and approves of the technical
and scientific disclosure contained herein.
On behalf of the Board of Directors of Lithium South
Development Corp.
Adrian F. C. Hobkirk
President and Chief Executive Officer
Investors / Shareholders call 1-855-415-8100 / website:
www.lithiumsouth.com
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release. The TSX Venture Exchange has not reviewed the content
of this news release and therefore does not accept responsibility
or liability for the adequacy or accuracy of the contents of this
news release.
This news release contains certain "forward-looking statements"
within the meaning of Section 21E of the United States Securities
and Exchange Act of 1934, as amended. Except for statements of
historical fact relating to the Company, certain information
contained herein constitute forward-looking statements.
Forward-looking statements are based upon opinions and estimates of
management at the date the statements are made and are subject to a
variety of risks and uncertainties and other factors which could
cause actual results to differ materially from those projected in
the forward-looking statements. The reader is cautioned not to
place undue reliance on forward- looking statements. We seek safe
harbor.
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SOURCE Lithium South Development Corporation