Ground Breakers: Piedmont completes US lithium BFS, Mincor hits nickel and Capricorn pumps $10m into Mt Gibson gold
$1.22 billion lithium stock Piedmont Lithium (ASX:PLL) says its Carolina lithium project will be at the bottom end of the global cost curve.
A new BFS today has outlined a path to production for the 30-year, 30,000t per annum lithium hydroxide operation in Gaston County, North Carolina.
Piedmont says it will cost $988 million to develop the integrated operation, which will include the construction of a lithium hydroxide plant to process spodumene from its Carolina deposit into chemicals for American auto and battery makers.
The project has been the subject of controversy this year, amid accusations the company delayed the filing of approvals and was losing the support of local officials.
The company subsequently said it was engaging with local stakeholders and filed a mining permit application in August this year.
According to the numbers presented today, the Carolina project would generate $459m in EBITDA annually over its first 10 years of operations at LiOH production costs of US$3657/t and AISC of $4,377/t, with a 3.5 year capital payback, US$2.04 billion post-tax NPV and 27% internal rate of return.
That is all using lithium hydroxide prices of US$18,000/t and spodumene prices of US$900/t, well below current price levels. At spot prices its NPV and IRR would roughly double.
The company is targeting a US market it says could exceed 460,000t by 2027. Part of its environmental pitch for the project is its onsite solar power and the unique conveyor system between its mine, concentrator and refinery, which would run on electricity.
That would remove trucks, reduce noise, dust and diesel-based CO2 emissions, Piedmont says.
President and CEO Keith D. Phillips said an FID will be made in 2022. While its current spodumene resources used in the BFS would only last for 11 years of the plant’s stated 30-year life, the company says it would use equity backed offtake agreements to secure spod from additional sources.
It has interests and offtake rights in projects in Quebec (with Sayona) and Ghana (with Atlantic Lithium).
“We will soon commence detailed engineering for the Project with a view to a final investment decision in 2022,” Phillips said.
“We are actively engaged in project financing discussions, including possible debt finance via the U.S. Department of Energy’s Advanced Technology Vehicle Manufacturing loan program, and potential strategic equity investments via the partnering process being coordinated by our financial advisors.
“An important priority for 2022 will be the evaluation of expansion opportunities incorporating the spodumene concentrate assets we control in Quebec and in Ghana. Our ambition is to build America’s largest lithium hydroxide business, and the spodumene resource base we’ve assembled during 2021 should underpin substantial growth.”
The revival of the Kambalda nickel field is well and truly under way after Mincor Resources (ASX:MCR) pulled the first development ore out of its Durkin North mine.
While the discovery of high-grade nickel at Kambalda should never be a surprise as such, the ore was hit some 36m before the target zone on the 485 level at the mine.
With estimated grade of 3.8% and high grade sulphides of up to 11.5% nickel, the development face could be a new high grade ore source outside of the existing mine plan.
First ore has also been intersected in a second development heading in Mincor’s target zone at the 510 level.
Mincor thinks the zone might be related to the historical 1252 Embayment, a structure with extensions through to Otter Juan, Kambalda’s biggest producing mine dating back to 1970.
The ore will be stockpiled ahead of the restart of BHP’s Kambalda Nickel Concentrator next year.
“Mining the first development ore at our Northern Operations is a fantastic milestone for Mincor and all of our stakeholders, and marks another key historic step in our journey towards the resumption of nickel production in the first half of next year,” Mincor MD David Southam said.
“Even more encouraging is the fact that our Kambalda operations continue to present opportunities for potentially exciting new discoveries – as evidenced by an interpreted new high-grade ore surface in the 485 level access within the Durkin North orebody, which has never been mined previously.
“Almost within 24 hours of that exciting development, our Operations Team has also intersected development ore ahead of schedule at the 510 access level of Durkin North, exactly within the targeted ore zone.
“These are great early achievements for our team as we close-in on first nickel concentrate production in the June 2022 quarter.
“With the nickel price currently well above the assumed price in the DFS and the outlook for the entire nickel sector remaining extremely strong over the next few years, this is a fantastic time for us to be resuming production in one of the world’s greatest nickel provinces.”
Capricorn Metals (ASX:CMM) has used early successes at its new Karlawinda gold mine to become one of the top performing gold companies on the ASX in 2021.
Amid that it also picked up the long dormant 2.08Moz Mt Gibson gold mine for around $40 million in cash and shares, which has been crying out for some TLC for decades.
Mark Clark’s Capricorn will do that in the form of a massive 110,000m drill drive, including a $10 million splurge on 81,000m of resource development drilling.
The program will start in January next year with up to three RC rigs turning for 4-6 months to provide the basis for a resource update and maiden ore reserve.
That could outline a project capable of becoming a second production centre for the newly minted gold producer.
A further 30,000m of aircore drilling will start in the March quarter as part of a regional exploration drive across Capricorn’s 24 lease, 213km2 MGGP project, with all key mining tenements now granted.
The company has applied for a further four exploration licences covering 491km2 with the WA mines department.
“The granting of all key mining tenure at the Mt Gibson project is an important milestone for Capricorn as it successfully completes the priority right application process that was underway on acquisition of the project in July 2021,” Capricorn boss Mark Clark said.
“Grant of the tenure effectively completes Capricorn’s acquisition, which at a cost of less than $20 per resource ounce, represents a compelling value proposition for the company.
“In January 2022 Capricorn will commence resource expansion and exploration drill programmes of more than 110,000 metres. We look forward to delivering an updated resource and a maiden reserve in 2022 which will progress the project towards a feasibility study.
“The Mt Gibson project represents a significant opportunity for Capricorn to become a two mine, mid-tier Australian gold producer.”